13 Sep 2010

Branson says Virgin may stop trans-Tasman route

6:44 pm on 13 September 2010

Virgin Airlines founder Sir Richard Branson says it is possible Virgin Blue could pull out of trans-Tasman route.

The Australian Competition and Consumer Commission last week issued a draft ruling that an alliance between Virgin Blue and Air New Zealand could lessen competition and increase prices.

The companies want to collaborate on trans-Tasman routes to compete more effectively against Qantas and its subsidiary Jetstar.

Sir Richard told the ABC that Virgin Blue is losing money on routes to New Zealand and if it could work with Air New Zealand it could offer a proper competitor to Qantas.

He says he is baffled by the commission's decision and it could have the opposite effect on the market.

"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 warned flights between Australia and New Zealand could become more expensive.