Air NZ brushes off Virgin Blue rumour - for now

File photo /Greg Bowker

Air New Zealand advised the stock exchange that it has not bought any shares in airline Virgin Blue but its statement, made in response to media reports, did not rule out such a move.

A Sydney Morning Herald report yesterday said the move was seen as a way for the national carrier to cement its relationship with Virgin Blue.

Two months ago the two airlines announced they intended to seek regulatory approval to create an alliance on transtasman operations, saying the proposed alliance would allow them to collaborate on future route and product planning, code sharing and frequent flyer programme benefits.

First NZ Capital analyst Jason Familton said an equity aspect to a proposed alliance was not necessary.

"They've obviously got the transtasman alliance ... so from that perspective it can work without an equity stake."

The benefit of buying a stake could be to block another party and strengthen the bond between two airlines, Familton said.

"They haven't said that they definitely won't do it and you can never say never in these types of things but at this stage it looks like they're not," he said. "I'd be surprised if they do it."

Regulatory approval for the alliance was finely balanced, Familton said.

Yesterday Air New Zealand said it was conscious that airline alliances frequently included an equity aspect, but the proposed alliance did not do so.

The necessary regulatory approvals for the transtasman alliance were still in process and it had received no indication of the outcome of that decision, Air New Zealand said.

A final decision on the alliance was expected by the end of the year.

Air New Zealand appeared to leave open the possibility of taking a stake in Virgin Blue at some point. Its announcement said that in the event of any such investment it would advise the market in accordance with market disclosure obligations.

- ADDITIONAL REPORTING: NZPA