Air New Zealand Ties-Up with Virgin Blue

Air New Zealand Ties-Up with Virgin BlueAir New Zealand aims to toss the reverse engines on transtasman control by the Qantas-Jetstar pair with its projected deal with Virgin Blue.

The airline put a stop to assumption that it was working on a deal with Virgin Blue Airlines yesterday, when it said that it would ask for regulatory sanction to form an alliance with the low cost hauler on the competitive trans-Tasman course.

Air New Zealand Chief Executive, Rob Fyfe said that the proposal would offer both airlines with a joint 56% market share.

It would fortify their gung ho offering on the route and watch them work together on future route and product planning, code sharing and regular flyer program advantages.

The alliance needs consent of the Australian Competition and Consumer Commission and New Zealand Ministry of Transport, estimated to take up to six months.

Application for approval from the New Zealand Commerce Commission under the Commerce Act is optional. The commission said that it will make its own appraisal of the competition issues.

In spite of decreasing capacity, Air New Zealand has been losing market share and funds on transtasman flights. Statistics released last week revealed that Air New passenger numbers taken on the transtasman and Pacific Island routes dropped 1.6% in March, 3.2% lesser than the same time last year.