Virgin Blue and Etihad Airways have signed a partnership deal which will see V Australia launch direct services to Abu Dhabi in 2011. However, some of Virgin’s flights will be axed, as the planes move onto the new routes.

V Australia will fly to Abu Dhabi in the Middle East but axe all of its loss-making flights to South Africa, a route on which it has been in competition with Qantas. V Australia’s flights to Phuket in Thailand will also be replaced by its short-haul offshoot, Pacific Blue. It comes a week after the airline announced it would stop flying within New Zealand, while V Australia would be replaced on the Fiji route by smaller short-haul Pacific Blue aircraft.

The two airlines will fly a total of 27 weekly services between Abu Dhabi and Australian destinations including Sydney, Brisbane and Melbourne. V Australia will operate three Sydney-Abu Dhabi services per week from February 2011 and three Brisbane-Abu Dhabi services per week by February 2012, using its new fleet of three-class Boeing 777-300ER and becoming the first Australian carrier to operate to the Middle East since Qantas axed the route in 1991. Etihad will operate the Sydney flight on the other four days, and also fly it’s own dedicated service daily. Etihad will also fly to Brisbane three days a week, and will also operate fly daily from Melbourne to Abu Dhabi.

V-Australia Boeing 777-300ER

The code share may confuse some passengers, as the cabins on board the aircraft are very different. V Australia fly with Business, Premium Economy, and Economy Class. However Etihad operate in a more traditional First, Business and Economy format.

The deal wasn’t entirely unexpected, as Virgin Blue has begun a further overhaul of its international network which operates under the V Australia brand, to avoid contravening an agreement with Singapore Airlines (who have a stake in Virgin Atlantic) and therefore have control over the use of the 'Virgin' name on International air routes.

Virgin Blue’s Chief Exec John Borgherri and his opposite number at Etihad had previously tried to work out a similar deal when Borgherri was at Qantas, but the flying roo wouldn’t agree for Etihad to have this frequent flyer program agreement with Qantas. Now however the new deal integrates the Etihad Guest and Velocity frequent flyer programs, allowing members to earn tier points and frequent flyer points along with reciprocal service benefits and lounge access for top tier members of both programs. The ability for members to use miles on both carriers’ services comes into effect from the 1st of October 2010.

Details: etihadairways.com/../mediacenter

There are a couple of advantages for Virgin Blue: it gives the airline access to 64 airports in Europe at one end of the kangaroo route, and at the other end, it will feed Virgin Blue’s domestic network with Poms who want to head on to more exotic locations around Australia.

The tie-up reinforces Virgin Blue's intention to grab a bigger slice of the corporate travel market from Qantas. It has resulted in Etihad and Qantas severing a codeshare agreement they signed early last year.