Air NZ and Virgin Blue are discussing a Tasman Sea routes partnership.

Airport news for Airport Hotels,Travel on 29/04/2010.

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Air New Zealand and Virgin Blue are discussing a prospective partnership that would see them overtake Qantas Airways for flights on routes between Australia and New Zealand. The Antipodean carriers have been in talks for many months now but have failed to reach an agreement.

More than 1.3 million people fly routes across the Tasman Sea every year. An alliance would help the two airlines compete with Qantas and Emirates for a piece of this passenger pie.

However, such an operation would take Virgin Blue away from a heritage of low-cost operations that avoids code sharing and connecting flights.

Stock analysts see the move as positive for a number of reasons. Such a partnership would bolster the ability of both carriers to compete in the lucrative trans-Tasman market.

Should the pair reach an agreement, it would also indicate Virgin Blue’s intention to become a full-service carrier. Plans in 2006 for a partnership between Air New Zealand and Qantas were scuppered by antitrust regulators.

Qantas seemed to be playing the antitrust card today when it issued a statement warning about the need to avoid distorting the competitive environment.

Virgin Blue was established ten years ago with two aircraft and $9 million dollars in funding from Sir Richard Branson.

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