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Virgin Blue-Air New Zealand alliance blocked

The Australian Competition and Consumer Commission (ACCC) issued a draft ruling yesterday rejecting a proposed alliance between the national airline of New Zealand, and the Australian low-cost carrier Virgin Blue.  The Commission, part of the government of Australia, explained that such an alliance would be “likely to reduce competition” along routes between Australia and New Zealand.  Air New Zealand and Virgin Blue originally sought approval for the alliance in an effort to “compete more effectively” with the Australian national airline Qantas AirwaysDenial by the Commission of permission to form the alliance is the second rejection of this type suffered by Virgin Blue over the past week.  Virgin Blue was recently denied permission to form a trans-Pacific alliance with the American-based carrier Delta Air Lines, by the United States Department of Transportation.

Air New Zealand possesses a plurality of the market share on trans-Tasman routes, with 38 percent of the total.  Qantas and its associated short range carrier JetStar together run second, with 32 percent of the market share.  Virgin Blue runs third with 18 percent.

Virgin Blue is the second largest airline based in Australia, behind Qantas.  It was founded in 2000 by the venture capital conglomeration Virgin Group Limited, itself founded by the British venture capitalist Sir Richard Branson.  Virgin Blue and its subsidiaries operate 75 aircraft to 31 destinations within Oceania, and on the continents of Australia, Asia, Africa, and North America.  Its corporate offices are located in the Bowen Hills area of Brisbane, Australia’s third-largest city, and capital of the Australian state of Queensland.  Virgin Blue operates its largest hub at Brisbane Airport (IATA: BNE; ICAO: YBBN), and operates secondary hubs at Tullamarine Airport near Melbourne (IATA: MEL; ICAO: YMML), and at Kingsford Smith Airport near Sydney (IATA: SYD; ICAO: YSSY).

Air New Zealand was formed in 1940 as Tasman Empire Airways Limited (TEAL), as a joint venture among the British Overseas Airways Corporation, which held a plurality of the shares; Qantas Airways; the government of New Zealand; and the now defunct New Zealand carrier Union Airways.  The airline was nationalized in 1965, when the government of New Zealand bought all shares.  It was privatized in 1989, and re-nationalized in 2001.  Air New Zealand and its subsidiaries operate 99 aircraft to 53 destinations within Oceania, and on the continents of Australia, Asia, Europe, and North America.  Its headquarters is in Auckland, at a complex colloquially called “The Hub.”  As far as airports are concerned, the airline operates its largest hub at Auckland International Airport (IATA: AKL; ICAO: NZAA).  Its focus cities are the national capital Wellington, the nation's second-largest city Christchurch, and the American city of Los Angeles.

As of the time of this post, Air New Zealand is the largest airline headquartered in the land of the long white cloud, and is the only airline to circumnavigate the world.

original stories

Australia Blocks Virgin Blue-Air NZ Tie-Up (CNBC Online)

Double blow clips Virgin Blue's wings (Sydney Morning Herald Online)

Another regulator thwarts Virgin Blue (Sydney Morning Herald Online)

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Reader Comments (1)

Hi There,
The competition regulator will now allow Virgin Blue and Air New Zealand

January 6, 2011 | Unregistered CommenterDirectories in NZ

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