Air New Zealand Plans Closer Ties with Virgin

Air New Zealand (ASX:AIZ) plans to expand its alliance with Virgin Australia beyond the the trans-Tasman joint venture. The interest was sparked by the US regulator's approval of its other joint venture with Delta Airlines between Australia and the US.

''We haven't focused on those questions yet because we are all hands to the pump to get the trans-Tasman joint venture up and running,'' chief executive Rob Fyfe said . ''But when we have achieved that … I am hopeful there are opportunities to expand the relationship.''

Fyfe cited that ''leveraging greater value'' out of their respective networks is possible. He also mentioned of considering ways to create ''incremental value'' from Virgin's alliance with Singapore Airlines.

''It is very valuable for Virgin to have a strong [passenger] feed relationship into Asia. It makes them more competitive in their home market,'' Fyfe said.

The Kiwi flag carrier is ready to sell a partial of the New Zealand's 75 percent stake in it, hoping that the sale will boost its appeal to large investors. The sale will also provide a ''meaningful stake'' to large investors and bolster its stock volumes.

A cut in the New Zealand government's 75 percent stake is part f a $7 billion asset sale throughout Tasman which depends on John Key's National Party winning national elections this November.