Air New Zealand is tempering speculation it's mulling a stake in Virgin Blue to firm up its proposed trans-Tasman alliance with the no-frills airline.The Sydney Morning Herald this morning reported Air New Zealand was considering taking a cornerstone stak
Air New Zealand is tempering speculation it's mulling a stake in Virgin Blue to firm up its proposed trans-Tasman alliance with the no-frills airline.
The Sydney Morning Herald this morning reported Air New Zealand was considering taking a cornerstone stake in Virgin Blue – Australia’s second-largest airline.
It reported aviation industry sources as saying Air New Zealand wanted to buy up to 15% of Virgin Blue after the airlines had appeared to have won indicative support from regulation watchdogs for their proposed transtasman tie up.
Air New Zealand said this morning it has not purchased any shares in Virgin Blue and any such purchase would require Foreign Investment Review Board approval due to Air New Zealand’s substantial government ownership.
“Air New Zealand is conscious that airline alliances such as the one planned with Virgin Blue frequently include an equity aspect, but the proposed alliance does not do so,” the airline said in a statement.
“The necessary regulatory approvals for the trans-Tasman alliance are still in process and Air New Zealand has had no indication of the outcome of this decision. A final decision on the alliance is expected by the end of the year.
Air New Zealand and Virgin Blue are seeking Australian Competition and Consumer Commission approval to create an alliance on the transtasman route that would deliver a combined 56% market share.
As well as fending off heavy competition from the Qantas-Jetstar double brand with a 34% share on the transtasman route, the Air New Zealand-Virgin Blue duo is aiming to increase combined yield from business travellers
The new alliance would provide an extensive network for Air New Zealand customers to fly further into Australia, the first leg with Air New Zealand and the rest of the journey with Virgin Blue.
Air New Zealand and Virgin Blue said in their application, lodged in May, their proposed alliance was expected to stimulate tourism on both sides of the Tasman, particularly to regional areas of New Zealand and Australia, as a result of improved frequencies and connections.
It is expected it will take six months for the application to be reviewed by the Australian Competition and Consumer Commission and the Ministry of Transport in New Zealand.
The Tasman is one of the most competitive airspaces with seven airlines and six independent operators operating a combined 800 flights a week and carrying about 5 million passengers a year.
