THE British airline Virgin Atlantic has hosed down speculation it plans to form a close alliance with Virgin Blue to help plug one of the biggest holes in the Australian airline's international network.
Virgin Blue has admitted that one of the glaring gaps in its network remains Asia, where it has struggled to find an alliance partner. The Australian airline is seeking regulatory approval for alliances on other key routes to the US, Europe via the Middle East and New Zealand.
It has prompted some analysts to speculate that Richard Branson's Virgin Atlantic is an ideal strategic partner for Virgin Blue, giving it a foothold in the fast-growing Asian market because of the British airline's daily services between between Sydney and London via Hong Kong.
Advertisement: Story continues below But Virgin Atlantic's chief executive, Steve Ridgway, said the airline was unlikely to pursue a closer tie-up with Virgin Blue because the ''arrangements we have got in place with them at the moment are pretty good''. The two airlines already have code-share arrangements.
''I am sure you will see more co-operation over time,'' he said. ''But that is something for the future.''
Mr Ridgway made a whistle-stop visit to Australia and New Zealand last week, which included a meeting with Virgin Blue's boss, John Borghetti.
Macquarie Equities has tipped Virgin Atlantic as an ideal partner but other brokers believe Virgin Blue needs an airline with a strong Asian network, such as Malaysia Airlines, to channel passengers into Australia.
Mr Ridgway also indicated that Virgin Blue could have to wait years before it can use the Virgin brand on its international flights. Since Mr Borghetti took the reins in May Virgin Blue has intensified its push to use the Virgin moniker on its aircraft which fly overseas routes.
But it remains stymied by a licensing agreement between Singapore Airlines and Sir Richard - Virgin Atlantic's two shareholders - which gives them the right of veto over the use of the moniker on airlines which fly internationally.
Mr Ridgway raised the possibility of Singapore Airlines selling all or part of its stake in Virgin Atlantic, although he said market conditions made it difficult to find a buyer.
''For them the real priority is around India, around China and around the competitive threat of the Gulf carriers. But they are not in any panic to sell their shares,'' he said.
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