United Airlines and Air NZ make revenue-sharing deal amidst NZ tourism boom

[WELLINGTON] United Airlines and Air New Zealand have struck a revenue-sharing agreement, the companies said on Friday, as airlines boost flights to New Zealand's fast-growing tourism market.

The agreement is set to come into force in July and would see the airlines coordinate sales and marketing to offer more flight options and better schedules on trans-Pacific routes, the companies said in a statement.

United Airlines would at the same time launch a flight to Auckland from San Francisco, which would initially run three times a week and increase to a daily flight from November.

The two carriers already have a code sharing arrangement and the new deal would help grow inbound tourism through United Airlines' extensive sales and distribution channels, Air New Zealand's CEO Christopher Luxon said in a statement.

New Zealand posted record tourism arrivals in 2015. The number of U.S. tourists rose 13.6 per cent in January from a year earlier and the United States was New Zealand's third largest source of tourists, according to data from Tourism New Zealand.

Airlines have already ramped up flights and introduced new routes to the Pacific nation from the United States, Latin America, China and the United Arab Emirates, while Qatar Airways plans a daily service from Doha later this year. "North American flights are a big earner for Air New Zealand in its long-haul business," said Andy Bowler, broker at Forsyth Barr.

"Securing a joint venture or a tighter relationship with United, its alliance partner, will provide a bigger defence against some of the incursions that will come the likes of Qantas and American Airlines."

Australia's Qantas upgraded its joint venture with American Airlines to a revenue sharing agreement in June New Zealand's Ministry of Transport said the agreement did not require regulatory approval in New Zealand.

Air New Zealand shares fell 1.2 per cent on Friday in a broader market down 0.3 per cent.

REUTERS