Sir Richard Branson says that Virgin Blue could stop flying across the Tasman unless it gets permission for its proposed alliance with Air New Zealand to proceed.
Branson told Radio National’s Sunday Profile program that the airline was currently losing money on its services to New Zealand, and that by working together with Air New Zealand that the two airlines would be able to compete effectively against Qantas and Jetstar.
“If we can’t have an arrangement like that there is a possibility that we would pull off the trans-Tasman,” he said. “We would potentially put our planes on Australian routes and the end result of all this could be that you have Qantas and Jetstar just dominating the trans-Tasman.”
Virgin Blue and Air New Zealand are now responding to the ACCC’s proposal to deny them permission to form an alliance on trans-Tasman services, with the response expected to focus on the volatile dynamics of the market. If that fails to change the ACCC decision, it is likely that the two airlines could then challenge it through the Australian Competition Tribunal.
