National carrier Air New Zealand and Australian budget operator Virgin Blue announced an alliance yesterday, signaling an intensifying battle with Qantas for dominance of the region’s market.
Air New Zealand shares traded flat at US$0.9898 after the announcement, while Virgin Blue slipped 3.4 percent to US$0.5319, before recovering slightly to be down 2.5 percent at US$0.5365 by early afternoon.
The deal, which requires regulators’ approval, includes code sharing on routes between Australia and New Zealand, collaboration on future route and product planning and frequent flyer program benefits.
Air New Zealand chief executive Rob Fyfe said if the plan is approved, it would be one of several measures to improve the airline’s competitive position in the face of Qantas’ bid for regional dominance, under its Qantas and budget airline Jetstar brands.
Air New Zealand and Virgin Blue said in a statement that the alliance would deliver cheaper airfares, increased flight frequency, better connections and expanded lounge access.
The airlines said the agreement was not a signal of intention by Air New Zealand or Virgin Blue to take a shareholding in the other.
The government owns a 75 percent stake in Air New Zealand and in 2001 gave the airline a NZ$1 billion (US$728 million) bailout.
The Center for Asia Pacific Aviation, an independent analyst group, said last week that an alliance between Air New Zealand and Virgin Blue in the market across the Tasman Sea would pose a concern for Qantas and Jetstar.
It noted that Air New Zealand needed to respond to being uncomfortably positioned about halfway between Qantas and Jetstar prices.
The center described Virgin Blue as a genuine low-cost carrier evolving into a full-service airline, while Air New Zealand was a full-service flag carrier becoming a low-cost airline.
“We believe we are well matched and the timing is good,” said Virgin Blue group co-founder and chief executive Brett Godfrey.
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
RULES BROKEN: The MAC warned Chinese not to say anything that would be harmful to the autonomous status of Taiwan or undermine its sovereignty A Chinese couple accused of disrupting a pro-democracy event in Taipei organized by Hong Kong residents has been deported, the National Immigration Agency said in a statement yesterday afternoon. A Chinese man, surnamed Yao (姚), and his wife were escorted by immigration officials to Taiwan Taoyuan International Airport, where they boarded a flight to China before noon yesterday, the agency said. The agency said that it had annulled the couple’s entry permits, citing alleged contraventions of the Regulations Governing the Approval of Entry of People of the Mainland Area into the Taiwan Area (大陸地區人民進入台灣地區許可辦法). The couple applied to visit a family member in
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