Rivals Air New Zealand and Qantas plan to join forces with a codeshare agreement on each other’s domestic networks. The airlines will not codeshare on flights between Australia and New Zealand but Qantas will add its code on up to 30 routes on Air New Zealand’s domestic network and Air New Zealand intends to add its code on up to 85 routes on Qantas’ network in Australia. The move comes after a recent decision by Air New Zealand not renew its trans-Tasman alliance with Qantas rival Virgin Australia. Tickets that include the codeshare will be available by the end of July for travel from October 28, when the AirNZ-Virgin alliance ends.   READ Air New Zealand ends alliance with Virgin. Qantas will also continue to codeshare on Jetstar New Zealand flights.

The airlines say the deal will see them coordinate check-in and handling at airports and will mean shorter connection times, opening up more onward flights for customers on each carrier’s domestic network. They are also promising faster journey times overall. Eligible customers will have access to a combined total of 36 domestic lounges on both sides of the Tasman when flying on routes covered by the codeshare agreement.

  Virgin, which has vowed to compete strongly on the Tasman and is due to announce its post-alliance plans soon, described the deal as bad news for consumers. "With the two major players in the New Zealand domestic market in partnership together, there’s no real competition in New Zealand and it is the consumer that will lose out,'' it said. "This will no doubt have flow-on effects for competition on the Tasman, given only the two biggest players who have over 70 percent of the market will be able to codeshare at each end. "We are surprised that a partnership between the two major airline groups in New Zealand is allowed." But Qantas chief executive Alan Joyce said the flying kangaroo and AirNZ would still be "fierce competitors" on trans-Tasman, trans-Pacific pacific and other routes. Joyce said there had been a click of cultures between the two airlines but joked he needed to be careful about what he said because the last time he was positive about Air New Zealand "believe it or not these guys used it in an advertising campaign". “Our relationship with Air New Zealand goes back almost 80 years,’’ he said. “We’ve been partners at various stages over that time and we have a lot of respect for them as a competitor. “A codeshare deal on our domestic networks makes sense for customers because it leverages the strengths we each have in our home markets.” Joyce said the agreement would be a big win for regional centers in both countries, citing Wagga Wagga to Kerikeri as a route that would now be easier. "They're the people at the moment who have the most awful time connecting and this will make a big difference,'' he said. Air New Zealand boss Christopher Luxon, who described the carriers as "frenemies" who would continue to compete "incredibly strongly",  said the codeshare would see two of the world’s best airlines offer their customers a full-service experience when they make domestic connections within New Zealand or Australia. He said four million people traveled across the Tasman annually and 140,000 Air New Zealand customers took onward journeys within Australia. "We know certainly that Qantas is a pretty fierce competitor of ours, the most formidable competitor we face, but also the one we respect the most and it makes us a much better airline as a consequence of the announcement,'' he said.

The two airlines are also looking at the potential to explore areas of mutual interest such as into biofuels, freight and ground-handling opportunities.