Qantas boss questions Virgin’s claims in Air NZ partnership bid

By Andrew Curran.

Virgin Australia is standing by the accuracy of its submission to the Australian Competition and Consumer Commission (ACCC) seeking approval for a reciprocal codeshare partnership with Air New Zealand, after a senior Qantas executive said the submission contained “factual inaccuracies and inconsistencies”.

Aero South Pacific understands that Virgin Australia will rebut multiple claims made by Qantas International CEO Cam Wallace about the planned partnership, which, if approved, will come at the expense of an existing codeshare agreement between Qantas and Air New Zealand.

In an October 23, 2026, letter to the ACCC, Wallace says, among other claims, that Virgin Australia has understated the combined trans-Tasman market share that Virgin Australia and Air New Zealand would enjoy if the ACCC approves the application.

He also says, contrary to claims in Virgin Australia’s initial submission, that there would be a significant loss for consumers when the existing codeshare agreement between Qantas and Air New Zealand ends.

“As a consequence of the proposed strategic alliance, Qantas has decided to terminate its codeshare arrangements with Air New Zealand which have been in place for more than eight years,” Wallace wrote.

“This will mean that from early April 2027, Air New Zealand customers will lose access to 85 codeshare routes on Qantas’ network. More than 40% of these routes and 26 destinations are not served by Virgin Australia.”

Planned partnership could put a brake on Qantas Group's trans-Tasman market share

Virgin Australia already has an existing one-way codeshare arrangement with Air New Zealand. However, the planned reciprocal agreement significantly raises the stakes. If approved, Virgin Australia will place its VA flight designator on Air New Zealand’s trans-Tasman and connecting domestic flights. In turn, Air New Zealand will place its NZ flight designator on Virgin Australia-operated domestic Australian connections to trans-Tasman services.

In addition, the airlines plan to co-operate on network planning, pricing, fare rules and conditions, sales and marketing, frequent flyer accrual and recognition, procurement and information sharing.

The planned co-operation only extends to flights covered by the code sharing partnership. Excluding trans-Tasman flights, it does not include Air New Zealand’s international network. Virgin Australia’s international flights are also outside the scope of the proposed partnership.

Among the many mooted public benefits, Virgin Australia’s submission says approving the partnership with Air New Zealand will likely provoke a competitive response from the Qantas Group, “further improving price and service offers for consumers”.

Virgin’s submission also suggests the partnership will provide “a more effective constraint on the Qantas Group across the trans-Tasman and beyond and behind in domestic Australia”.

Qantas wants application's claims carefully scrutinised

Having moved to terminate its existing partnership with Air New Zealand, Qantas is not objecting to what Virgin Australia and Air New Zealand want to do but says the ACCC should scrutinise some of their claims.

Wallace is dubious of Virgin Australia’s claim that the proposed partnership will not prevent it from expanding its own trans-Tasman network, which currently extends only to flights to Queenstown (ZQN) from Australia's east coast capitals. Wallace says that claim needs to be “carefully scrutinised”.

While Virgin Australia’s own aircraft provide limited trans-Tasman coverage, Air New Zealand is a major player in the trans-Tasman market, flying to ten Australian airports from four New Zealand airports. The most recent Australian Government data, covering July 2026, indicates Air New Zealand operated 700 trans-Tasman flights that month, carrying 252,551 passengers.

Virgin Australia operated 143 return flights to Queenstown from Sydney (SYD), Melbourne (MEL) and Brisbane (BNE), carrying 45,569 passengers. Wallace says the combined market share “is not trivial or inconsequential”.

For its part, the Qantas Group, which includes the Qantas and Jetstar brands, flies to six airports in New Zealand from five Australian airports. The same data shows the Qantas Group carriers operated 1,131 return flights to New Zealand in July, carrying 335,656 passengers between the two countries.

Citing the available seat kilometres metric used in Virgin Australia’s application to the ACCC, Wallace says the combined Air New Zealand and Virgin Australia partnership would command around 44% of the market, while the two Qantas Group carriers would have a 51% market share.

Fifth-freedom operators such as Qatar Airways and China Airlines mop up the remaining market share.

Wallace also raised concerns about Virgin Australia’s redacted supporting evidence, including an economic report by consultancy firm NERA that was not publicly released. He says the application “structurally understates” Air New Zealand’s true corporate market share, which Wallace claims is relevant because one of the aims of the proposed partnership is for Virgin and Air New Zealand to increase SME and corporate market share.

Wallace says any claimed public benefits beyond the existing one-way codeshare partnership between Virgin Australia and Air New Zealand “should be thoroughly scrutinised for accuracy”.

However, Virgin Australia says the many public benefits of the planned reciprocal partnership are laid out in its original application to the ACCC. The airline maintains that its claims are accurate and says it will address any concerns raised through the normal ACCC authorisation process.

Broad support for Virgin Australia's planned partnership with Air New Zealand

Of the seven other responses to Virgin Australia’s application to the ACCC, five were broadly supportive, one expressed reservations and one opposed the proposal.

The Board of Airlines Representatives of Australia (BARA), Auckland Airport, Christchurch Airport, Canberra Airport and the New Zealand Airports Association all recommended that the application be approved. The Australian Travel Industry Association says any approval should be strictly limited “to the cooperation necessary to achieve the identified public benefits”, while otherwise leaving the playing field as open as possible. One submission, from an individual, opposed the proposal.

The deadline for submissions has now closed, and the ACCC intends to release its draft determination later this month and a final determination early next year.

Photo: AI-Generated.
Contact the writer: andrew@aerosouthpacific.com