14-Sep-2010 11:10 AM

Virgin Blue may suspend trans-Tasman services

Virgin Blue President, Sir Richard Branson, stated the carrier may consider suspending all trans-Tasman services, after the Australian Competition and Consumer Commission (ACCC) issued a draft ruling rejecting Virgin Blue and Air New Zealand’s plans for a trans-Tasman alliance (ABC News, 13-Sep-2010). Sir Richard warned Virgin’s exit would leave Qantas and Jetstar with a larger market share, which would result in increased fares on the route.

Virgin Blue: “We're losing money on those routes to New Zealand. We think if we can work together with Air New Zealand we can offer a proper competitor to Qantas. If we're a strong competitor, we can keep fares low and we can keep Qantas honest and we believe that's in the interest of the travelling public … If we can't have an arrangement like that there is a possibility that we would pull off the trans-Tasman. We're business people in the end and we need to make money on our routes. 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,” Sir Richard Branson, President. Source: ABC News, 13-Sep-2010.

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