Virgin Blue revives bid for NZ link

Australian discount airline Virgin Blue is reviving its bid to fly between Australia and New Zealand.

Virgin Blue's commercial head, David Huttner, said yesterday that he hoped to call on the Government while in New Zealand next week.

"I think we will come down very soon to kickstart the process again and see where we left off ... The application process became dormant," Mr Huttner said.

A spokeswoman for Transport Minister Mark Gosche said he planned to meet Virgin Blue representatives on Monday, but that was a routine meeting.

The no-frills carrier - owned by British entrepreneur Sir Richard Branson - said in April it wanted to expand to New Zealand and hoped to offer international and domestic services, flying Boeing 737s, by the end of this year.

However, Mr Huttner said the financial problems of Air New Zealand, including the collapse of its Australian unit Ansett, had delayed matters.

Air New Zealand is being recapitalised by the New Zealand Government in an $885 million injection of cash and equity after it lost $1.4 billion in the year to June.

The September collapse of Ansett, which had 42 per cent of the Australian domestic market, left Qantas Airways with the only nationwide network, while Virgin Blue flies some of the country's main trunk routes.

"There is a lot of strain on our resources because of the whole situation in Australia," Mr Huttner said.

"Everyone in the company is pretty stretched to the full expanding as quickly as we can."

Virgin Blue's bid to fly to New Zealand under the single-aviation market rules did not hinge on a majority selldown to Australian interests, Mr Huttner said.

The airline - which Air New Zealand tried to buy this year in a failed attempt to combat fierce Australian domestic price competition - will be operating 15 aircraft in Australia by Christmas, he said, and hopes to have 25 in the air next year.

- REUTERS

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