Virgin to British for Kiwis

New Zealand government officials today said they would welcome cut-price airline Virgin Blue to the domestic market, but will not allow it to fly the lucrative route to Australia.

Virgin Blue, which is owned by Sir Richard Branson, is seeking a slice of New Zealand’s domestic market, which opened up with the demise of Qantas New Zealand. Virgin Blue already operates domestic routes in Australia.

Virgin Blue also wants to operate international flights between Australia and New Zealand, claiming it could not survive on domestic routes alone.

New Zealand Transport Minister Mark Gosche, who met with Virgin Blue executives today, said if the airline wanted only domestic routes it would be able to start operating immediately.

However, Virgin Blue could not travel the Australia-New Zealand route while it remains a British company, he said.

Australia and New Zealand airlines are party to an ‘‘open skies’’ policy that allows only carriers from those nations to operate international flights between the two countries.

Gosche said Virgin Blue could overcome the open skies policy by floating the company in Australia and New Zealand.

’’If it was 50% owned in New Zealand and Australia, it would not be an issue,’’ Gosche said.

Virgin Blue chief executive Brett Godfrey said Virgin Blue was already an Australian company.

’’As defined we’re an Australian airline and I would like to think this issue can be resolved very quickly,’’ Godfrey said.