Virgin Blue and Etihad reveal plans to expand alliance

Virgin Blue and Middle East carrier Etihad are in the process of expanding their alliance in Australia, with a multi-million dollar project.

This comes with a bid to cut back-office costs and improve efficiency of airport and maintenance services.

For the first time since the carriers struck up the alliance in late August, Virgin chief executive John Borghetti and Etihad CEO James Hogan revealed they had plans to build their own joint lounge facilities at Sydney International Airport.

The carriers received interim authorisation in September for the 10-year alliance, from the Australian Competition & Consumer Commission.

Under the terms of the alliance Virgin's loss-making international carrier V Australia would abandon services to Phuket in Thailand and South Africa and concentrate on Los Angeles in addition to new services to Abu Dhabi.

The two carriers are now working on expansion plans beyond flight services.

Hogan told The Australian news paper that training, purchasing, engineering support or even moving forward on aircraft acquisitions all those areas would be on the table.