Virgin Blue fights for future growth, to argue alliances with regulators
Firmly convinced that its planned alliances were crucial for growth, embattled Virgin Blue Holdings Ltd (ASX: VBA) said over the weekend that it is bent on arguing its case with government regulators to finally win their approval on the proposed partnerships with US and New Zealand airlines.
The US Department of Transport and the Australian Competition and Consumer Commission (ACCC) disapproved Virgin Blue's proposed collaboration on specific routes with Delta Air Lines and Air New Zealand.
While another planned partnership with Etihad Airways could also be derailed in a series of setbacks that Virgin Blue chief executive John Borghetti described as 'very disappointing' for the carrier's prospects.
Mr Borghetti said that Virgin Blue has a solid case and it intends to purse all the transactions and go through the process though the chief executive stopped short of saying that the company would bring its plea before the Competition Tribunal if talks with the ACCC proved unsuccessful.
He said that Virgin Blue is focus on its campaign to exhaust all possible efforts to achieve the realisation of the company's planned tie-ups since they would benefit the travelling public.
Mr Borghetti stressed that Virgin Blue is prepared to go through "whatever lengths we need to try and bring competition to the international network and if we are allowed to proceed with this alliance, we're going to bring that competition across more routes."
Virgin Blue said that its proposals all amount to the arrival of a second Australian airline that is globally competitive, pointing to the possibility that the country would finally have a carrier flying non-stop in the Middle East once its planned partnership with Etihad is given the green light by regulators.
Mr Borghetti said that the planned link up with Etihad would open up opportunities in the Middle East, Europe and Northern Africa so it would be a complete surprise if the proposal would also be knocked back.
Besides, Virgin Blue maintained that the ACCC had earlier allowed Qantas to form alliances on its service routes, making it hard for the company to simply be told by the same regulator that "we couldn't have a relationship with Air New Zealand, so we've got to persuade them that it is blatantly unfair."
Virgin Blue owner Richard Branson argued last week that the alliances being sought by the company would give it the necessary muscle to offer more competition to big players such as Qantas, stressing that a strong Virgin Blue would lead to further benefits for the travelling public, which he hoped would be realised by ACCC.