Air China and Air New Zealand announced this week that they are extending their strategic alliance partnership by a further five years until March 2026, with both carriers committed to working together as the industry recovers from the pandemic.
The Benefits of Airline Alliances
Alliances between airlines are becoming an increasingly dominant factor in air transport. This global phenomenon has resulted in collaborative business agreements, code-sharing, marketing, price cooperation, schedule cooperation, and shared access to facilities. For airlines, alliances allow them to consolidate their presence in a very competitive environment. Partnerships and alliances give airlines the opportunity to access a large air network, extend their reach and cooperate with industry businesses on a substantial level.
One of the biggest benefits of alliances is reduced ticket prices for passengers and lower operating costs for carriers. Airlines are also able to reduce passenger travel time by offering a more varied flight schedule and choice of time slots. Airline alliances can enhance the passenger experience at all levels by improving the quality of standards and passenger services. Currently, the three largest airline alliances are Star Alliance, SkyTeam, and Oneworld.
Rebuilding the Tourism Industry
Star Alliance member Air China, China’s national flag carrier, is renewing its strategic alliance partnership with fellow Star Alliance carrier Air New Zealand. The alliance agreement between the two airlines was first established in 2015 and has now been extended until March 2026 after approval by regulators in China and New Zealand.
Prior to the pandemic, China was New Zealand’s second-largest international visitor market and one of its most valuable. New Zealand received 450,000 visitors from China in 2019, generating a holiday visitor spend of NZ$1.5 billion. The key aim of the China-New Zealand alliance is to rebuild the tourism industry from the severe impact of Covid-19. Through the alliance, services can be easily booked through either airline, and passengers of both airlines enjoy reciprocal frequent flyer benefits. Air New Zealand customers receive better access to Air China’s comprehensive domestic network and for Air China’s passengers, the alliance enhances their access to New Zealand’s air travel regions.
The alliance extension announcement was made by Air New Zealand Chief Executive Officer Greg Foran at the China Business Summit in Auckland. Foran said the partnership with Air China will “help New Zealand rebuild together”.
“China is an incredibly important market for Aotearoa, and for Air New Zealand. The renewal of our strategic cooperation with Air China will be a vital boost for our tourism industry as it recovers from the severe impact of COVID-19. Our alliance with Air China has delivered, and will continue to deliver, real benefit to New Zealand – including greater choice, extra seats and more flights into New Zealand. It’s a great example of how we can build sustainable air connectivity to and from New Zealand.”
Before travel restrictions closed international borders, Air New Zealand flew between Auckland and Shanghai, while Air China flew between Auckland and Beijing. Foran concluded that although COVID-19 has affected passenger travel, the trade and business cooperation between China and New Zealand has remained relatively stable:
“Our Shanghai route has the highest proportion of cargo on any network we fly. Last year we carried 2,600 tonnes of exports to Shanghai – up 23 percent on the year before. We’re proud to bring PPE into New Zealand and take the best of Aotearoa’s premium fresh produce – seafood, red meat, dairy, fresh fruit and vegetables – to Shanghai.”
Partnerships and alliances have accelerated during the pandemic as air transport and tourism industry business join forces to pool resources and rebuild together. These alliances are not only vital for industry recovery but will also be of great benefit to passengers in the long term.
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