Air New Zealand Ltd (ASX:AIZ, NZX:AIR) the nation's largest carrier, has dismissed speculations it is looking to acquire a stake in Virgin Blue Holdings Ltd (ASX:VBA).

Air New Zealand is conscious that alliances such as the one planned with Australia's second-largest airline usually include an equity aspect, but their proposal does not do so, it said in a statement. The Sydney Morning Herald today reported New Zealand's flag carrier wanted to buy up to 15 percent of Virgin Blue to cement their relationship.

Air New Zealand and Virgin Blue declared plans in May for a revenue-sharing alliance, in an effort to bolster their defences against Qantas Airways Ltd and Emirates on routes flown by more than 5 million passengers a year.

Although the planned teamup has faced opposition from New Zealand airports for fears it will decrease flights and increase fares, analysts have said the alliance has a high chance of gaining approval from the ACCC and the Ministry of Transport in New Zealand.

According to Air New Zealand, the necessary regulatory approvals are still in process and it has had no clue of the result of this decision, A final ruling is expected by the end of 2010.

Air New Zealand said it would need Australian Competition and Consumer Commission and Foreign Investment Review Board approval buy 15 per cent shares in Virgin Blue because the New Zealand government is a 77 percent shareholder.