Virgin Australia CEO, John Borghetti, has commented that the airline was “somewhat held back” by their Tasman codeshare alliance with Air New Zealand.
Speaking at the CAPA Australia Pacific Aviation and Corporate Travel Summit in Sydney yesterday, Borghetti said with Virgin’s new Tasman offering of extra food and WiFi among other new perks, the airline will be in a “good competitive position”.
“To some degree, our product was held back on the Tasman because of the alliance. We don’t have that issue anymore. Or won’t have, shortly,” the CEO said.
Borghetti hinted the end of the alliance would also give Virgin the opportunity to introduce Tiger Airways flights on the route.
“It also opens up the door for us should we want to use Tiger,” he said.
“Air New Zealand is a fine carrier but our product will stand up.”
Air New Zealand announced in early April that its strategic alliance with Virgin Australia would be coming to an end on October 27 this year.
Two months later, Air New Zealand announced a new code-share partnership with Qantas on Domestic services beginning on October 28.
Borghetti made the comments during a “fireside chat” with CAPA executive chairman, Peter Harbison.
Harbison asked Borghetti what he thought of Air New Zealand’s new alliance with Qantas.
“On a stand-alone basis… this doesn’t really make sense. So what’s part two here because this can’t be the whole story,” Borghetti said.
“I believe there could be a part two and I think that would be more worrisome for competition on the Tasman, we’ve made some comments about that formerly through regulators and we’ll continue to make them.”
He also expressed concerns as to why Air New Zealand would want to put a codeshare on their competitor.
“It just doesn’t ring true to me but I’m sure they’ve got their reasons and good luck to them. We’ve expressed our views, as I said, to the ACCC,” he said.
When asked about the nature of Virgin’s continuing relationship with Air New Zealand, Borghetti said it would be on a “need basis”.
“I look back and I say… why didn’t that deal continue?”
“I can’t really remember in my 45 years, a situation where two carriers whoever they may be, whether it’s us or somebody else had wanted to [cancel] an alliance on the Tasman.”