Air New Zealand ups its stake in Ansett er Virgin Blue

Air New Zealand took its stake in Virgin Blue (owners of V Australia and Virgin Australia) to 19.9% as a result of a fairly low share prices.

The last time they took an interest in an Australian airline, it almost bankrupted Air New Zealand and the end result was that Australia's longest running domestic carrier Ansett ceased to exist.

250Image via WikipediaTen years later, Air New Zealand are hopefully wiser and Virgin are a better business. Former chief executive Rod Eddington "described Ansett publicly and internally as a great airline, but a poor business".

It makes huge sense for Air NZ to have a strong relationship with an Australian carrier. The tie ups with V mean passengers can flow into and out of the Australian and New Zealand markets and Air NZ international routes.

It also makes sense for Virgin to join Air NZ in the Star Alliance network just as Ansett was a member. They are clearly out to compete heavily with Qantas domestically.  The question is long term whats the plan for V Australia, their international arm?. They will come in under the Virgin Australia banner in 2012 but what are their plans beyond that. Flights to Phuket and South Africa are halted. Fiji is off the cards and China seems on hold. Qantas is ramping up Asian expansion. Will Virgin focus on middle east  or do the same as Qantas?

In the meantime, an ex Virgin executive has gone to Tiger.

As always, the Australasian airline scene remains interesting.

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