An alliance between Air New Zealand and Virgin Blue
(ASX:VBA) looks to be a lot less complicated than previous attempts by Qantas to work with the Kiwi airline.
Air New Zealand and Virgin Blue revealed this week they’ve been in talks for months about some kind of commercial partnership but no agreement has yet been reached.
The Centre for Asia Pacific Aviation says that symmetry does exist between to two companies with Virgin a genuine low-cost carrier evolving into full-service airline, and Air New Zealand a full service carrier becoming low cost.
Air New Zealand needs to do something as it's been losing market share on Tasman routes.
Market competition issues might be a factor with services from Dunedin and between Cairns and New Zealand nearly dominated by both carriers but trans-Tasman flights to Auckland remain a highly competitive market.
Previous attempts by Qantas and Air New Zealand to work together didn’t work out, but an alliance with Virgin Blue could have more of a chance especially with insight coming from former Qantas executive John Borghetti who is moving to Virgin.
Virgin Blue posted a $160 million loss in 2009.
