Air New Zealand in Talks With Virgin Blue

Virgin BlueAnalysts have revealed that talks related to forging an alliance between Air New Zealand and rival Virgin Blue could permit the airlines to make use each other's domestic routes.

"Air New Zealand confirms that the airlines have been in ongoing discussions for several months but no agreement has been reached," the Auckland-based airline said in a statement today.

The company's shares performed steadily, marking a $1.37 closing level yesterday after the announcement. Virgin Blue remained unchanged at 58 Australian cents on the ASX.

However, the national carrier posted its unwillingness to disclose further details on discussions, but will advise markets as required if an agreement is completed.

First NZ Capital analyst Jason Familton uncovered that an alliance could associated with the Virgin Blue's domestic network in Australia and Air New Zealand's domestic network here.

It is reported that Virgin Blue is in a process to boost its own operations, unveiling at the initiation of this month that it has undergone a deal with Boeing Co. to purchase over 105 new 737 aircraft, aimed to replace existing narrow body planes.