Virgin Australia and Air Canada Strategic Partnership

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In an ever-evolving world of aviation, there are more and more strategic partnerships being formed between airlines, as they seek to reposition themselves and adapt to a market in constant evolution. These partnerships have pushed airline cooperation to a new level, even more than the traditional big global alliances. In December 2016, Virgin Australia and Air Canada announced such a partnership.

Air Canada Virgin Australia Logo

Key Access

The rationale behind the move is pretty straightforward and solves a problem for Air Canada and Virgin. Per the Air Canada news page, the CEO of Air Canada Calin Rovinescu stated that “This agreement with Virgin Australia lays the groundwork for a mutually beneficial commercial cooperation that will offer Air Canada customers more travel options and frequent flyer benefits when traveling within Australia and New Zealand.” This deal solves the problem for Air Canada which has daily flights from Vancouver to Brisbane and Sydney. But with no Star Alliance partners in Australia, there are very few options for passengers to make domestic connections on the same ticket.

Air Canada A319
photo credit: caribb Polar Blue Airbus A319 via photopin (license)

The deal is not as big a problem solver for Virgin Australia since it already has a transpacific partnership with Delta. The main benefit for Virgin would be increasing the options for its transpacific clients, as well as strengthening their position in the Australian domestic market for incoming transpacific passengers. Although Delta is likely to remain the most important partner for Virgin Australia on trans-Pacific routes.

The Deal

The deal is structured in several phases. First, in early 2017 the companies will implement a codeshare agreement. This will give Air Canada passengers the option to book flights to 10 additional destinations in New Zealand and Australia. Virgin passengers arriving in Los Angeles will be able to carry on to Vancouver, Toronto, Calgary, and Montreal.

Virgin Australia
photo credit: wilco737 Virgin Australia Boeing 777-300ER in LAX (VH-VPH) via photopin (license)

In the longer term, it will be possible for Air Canada passengers to earn Aeroplan miles on their domestic travel within Australia, although the details have yet to be announced. The second step of the agreement will see both airlines offering reciprocal redemptions for both their frequent flyer programs. There is also the plan for Virgin to codeshare Air Canada flights between Canada and Australia.

Overall

This is a great mutually beneficial deal for Air Canada and Virgin Australia and should help Air Canada grow its transpacific market, especially if it adds more routes into Australia. For Virgin, it will only strengthen its position and increase its market share in the domestic Australian market.

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Comments

  • This is good, but Virgin Australia really needs to just join Star Alliance already!

  • The_Bouncer says:

    It’s a pity VA never joined Star Alliance. It would increase the options tremendously.

  • I find it a rather strange deal with no apparent benefit to their customers that will make booking milage to Air Canada even more complicated and confusing after the codeshare is introduced.

  • I am wondering if this will have any impact on the fares between USA and Australia or New Zealand???

  • So since Virgin America is kinda a separate entity in the Virgin company..this would not be effecting Alaska and Virgin America merge? My hubby is thinking about Australia. I wonder if I’d be able to use Alaska miles on Canada Air and then on to Virgin Austalia?

  • Excellent!! I have some Air Canada (Aeroplan) miles that are itching to be used! I can’t wait.

  • It will be very nice if Virgin Australia flights become bookable with Air Canada miles (Aeroplan).
    As you pointed out in the article, Star Alliance is pretty much dead in Australia, which is a big pain to deal with for those of us mainly flying on Star Alliance.

  • I’m not a huge fan of this type of arrangement, although I suppose something is better than nothing. I would much rather see airlines join proper alliances.

  • Gotta love the partnerships! The more options for redemption of points, the better.

  • The possible advantages for air Canada points usage on flights to carry you all the way through to final destinations inside Australia is def a bonus. Not sure about the rest

  • Time to start putting my Air canada points to use!

  • ADAM PARSONS says:

    Great when two providers pair up as it opens up lots more routes and cross earning opportunities.

  • The best it’s when the advantages are for a wider group of airlines. I mean it was better if Virgin Atlantic would have join an alliance (Star Alliance for example).

  • Might be that this is one good way it can join with airlines from different alliances instead of being held to one partnership as Virgin Australia can earn miles with Delta as a example.

  • I wonder whether aeroplan points can be redeemed for flights within Australia with the merger? Or whether multi city bookings with multiple stops in Australia will be available with Air Canada points?

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