Virgin Blue mulls partnership with Star Alliance

Virgin Blue may ink a partnership with Star Alliance as part of the carrier's push towards what is internally called "the new Blue".

Company CEO John Borghetti is attending this week's meeting of Star Alliance airline executives in Queenstown, New Zealand, ostensibly as a guest of Air New Zealand as the two carriers count down towards this week's decision by the ACCC on their proposed trans-Tasman partnership.

Borghetti is willing to play every card in his hand, and then some, as he reshapes the low-cost Virgin Blue into a full-service airline capable of more directly competing with Qantas.

"There's a chance for Virgin Blue to look at everything," Borghetti says. "We've got a lot on at the moment and we're evaluating everything, and I mean everything, and certainly as we go forward we'll see where that leads.”

While Star Alliance is the world's first and largest airline alliance, with 27 carriers signed up, it has not had an Australian member since the 2002 bankruptcy of Ansett Airlines.

Star is however very strong in Asia, with major players Singapore Airlines, Thai and ANA on the books, and Borghetti has spoken many times of his desire to form a partnership with a leading Asian carrier. This week's meeting could also help set that stage.

None of Virgin Blue's existing partnerships are with Star Alliance partners. Etihad belongs to the Arabesk Airline Alliance, which is more of an operational venture for coordinating schedules, reducing route duplication and joint fuel purchasing. US carrier Delta – a tie-up that has yet to be approved by US authorities – belongs to SkyTeam, the world's second-largest airline alliance (ahead of OneWorld).