Codesharing deal could boost competition

WILLIAM MACE
Last updated 17:17 20/11/2012

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Singapore Airlines and Virgin Australia intend to expand their "code-sharing" agreement across the Tasman, with international flights between Australia and Wellington, Dunedin and Queenstown.

A code-share gives one airline the opportunity to sell seats on flights operated by another airline partner without having to use their own aircraft or run additional flights.

Singapore Airlines currently operates two flights a day between Auckland and Singapore, as well as one from Christchurch, but the Virgin code-share means Kiwi travellers outside those centres will be able to tap into Singapore's international network more easily.

While the deal would not mean more capacity on trans-Tasman flights it could bolster competition on the route.

Virgin Australia already has a deeper "integrated services" agreement with Air New Zealand for flights across the Tasman, in which the two companies can collaborate on setting fares.

Air New Zealand announced yesterday that it would buy a further 49 million shares in Virgin, worth over $30m at yesterday's share price, in order to maintain its 19.99 per cent stake as Virgin issued more shares to Singapore Airlines.

Singapore Airlines said today it would also share Virgin's flights into New Zealand, starting "in the coming months".

A Singapore Airlines spokesman said the deal would expand the airline's distribution network and allow its customers to fly between destinations such as London and Queenstown.

General manager of Singapore Airlines New Zealand Edwin Chaing said the the new agreement with Virgin Australia was great for New Zealanders.

"It delivers to customers our promise of continually providing more travel options, better flight connections and frequent-flyer programme benefits," said Chaing.  

"Adding trans-Tasman codesharing into Dunedin, Queenstown and Wellington is a testament to our ongoing commitment to the region."

Air New Zealand could not be immediately reached for comment on its partner's new alliance on the trans-Tasman routes.

Singapore's existing code-share agreement with Virgin already gives Australian customers access to Singapore's flights to Europe from Adelaide, Perth and Darwin, but the companies also announced this would soon extend to Virgin's east coast ports such as Sydney and Brisbane.

From the first quarter of next year the code share will reach from Australia to Europe, the United Kingdom and additional cities in Asia, via a Singapore hub.

Under the new deal with Singapore Airlines, Virgin Australia customers will have access to a total of 64 destinations in Asia and 12 destinations in Europe from Sydney, Melbourne, Brisbane, Adelaide, Perth and Darwin on the Singapore Airlines and SilkAir networks.

Meanwhile Singapore Airlines passengers will have immediate access to codeshare flights to all of Virgin Australia's 32 Australian domestic destinations.

Virgin Australia group executive of alliances, networks and yield Merren McArthur said the code share addressed strong demand from customers to be able to travel onward from Asia to Europe, particularly from Australia's main east coast cities.

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She said the codeshare on Australian domestic services would also serve to promote tourism in Australia.
 
Singapore Airlines and Virgin Australia entered into a wide-ranging partnership last year. In addition to codesharing, the alliance covers reciprocal frequent-flyer programme benefits and lounge access, co-ordinated schedules to provide seamless connections, and joint sales, marketing and distribution activities.

- BusinessDay.co.nz

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