Virgin Blue, Air NZ in alliance talks

Virgin Blue Holdings Ltd and Air New Zealand Ltd are in discussions regarding a trans-Tasman alliance, both airlines confirmed on Wednesday.

The two airlines have been in "ongoing discussions for several months", Air New Zealand said in a statement.

"But no agreement has been reached," the Auckland-headquartered airline said.

Virgin Blue said discussions regarding the potential tie-up was on "commercial co-operation on trans-Tasman markets", but gave no further details.

"Under the company's continuous disclosure obligations, should any transaction be completed, the airline would promptly inform the market," the Brisbane-based Virgin Blue said.

Virgin Blue is waiting for the US Department of Transport to rule on its proposed tie-up with Atlanta-based Delta Air Lines on trans-Pacific routes.

The two airlines have received Australian Competition and Consumer Commission (ACCC) approval to collaborate on routes, pricing, revenue management, schedules and capacity in the Australia-US market.

In July last year, Air New Zealand general counsel John Blair described the Virgin Blue-Delta alliance as "anti-competitive" and that "most of the benefits they outline for the consumer can be achieved through more usual arrangements such as code sharing".

It is not Air New Zealand's first tilt at a partnership with an Australian carrier.

In 2003, the ACCC knocked back a proposed alliance between Qantas Airways Ltd and Air New Zealand on the grounds that it would be "highly anti-competitive and offer little benefit".

Virgin Blue shares closed up 0.5 of a cent, or 0.86 per cent, at 58.5 cents.

Air New Zealand finished at $1.045, down 1.5 cents, or 1.42 per cent on Wednesday.

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