The pursuit of a little bit of Virgin Blue by Air New Zealand comes at a time when Richard Branson, who owns 26% of the Australian airline, is working the European finance media with stories confirming that he is prepared to sell down his 51% stake in the UK flag carrier Virgin Atlantic in his quest for a merger or strong alliance with an airline that will render it more capable of withstanding the triple trans Atlantic alliance between British Airways, American Airlines and Spanish flag carrier Iberia.

Might he be the source of part of the additional shares Air New Zealand is seeking to give it a stake of almost 15% in Virgin Blue?

That is just one of many questions which may be answered in the coming days or weeks.

Successive Air New Zealand managements have previously expressed similar sentiments to Branson, in that they regarded some form of powerful strategic shareholding with another major carrier as critical to its longer term survival. Those views existed before Air New Zealand had bought first half and then all of Ansett Airlines, an exercise in which the Kiwi carrier nearly destroyed itself as well as bleeding and discarding the Australian carrier, which was itself facing extinction, and before Singapore Airlines made its disastrous foray into the merged Air New Zealand/Ansett entity.

The Air NZ of today has long purged itself of the disgrace of the Ansett and Singapore Airlines calamity, but if there is one thing that the current managements and immediately past managements of Qantas, Virgin Blue, and Air New Zealand publicly agree upon, it is the need for workable rationalisation with other carriers in the medium term.

But will a network of minority investments in regional carriers, as indicated in its announcement work for Air New Zealand? Or will someone come in over the top and try to structure a more ambitious rationalisation, in which a single company, along the lines of  Air France KLM, owns and operates the separate national brands of Air France and KLM for a common shareholder registry ?

What exactly will Qantas do? What will Singapore Airlines do? What might a consortium including say the Bank of China, or the sovereign funds of say Abu Dhabi or the Singapore government do? There are powerful interests watching Air New Zealand, and each other, for the right opportunity for consolidation or rationalisation on a hemisphere wide or global scale, and to the extent that they have shown their hands in the past, they have wanted control, not minority investments.

Air New Zealand’s stated goal seems pretty pale beside the Qantas strategy to extend Jetstar as a trans border franchise throughout the Asia-Pacific. Singapore Airlines has always emphasised control in enunciating its ambitions, and has made it known it didn’t get enough out of its 10 year old investment in 49% of Virgin Atlantic, and will sell it for the right price.

There was never any doubt among close observers that Brett Godfrey wanted a powerful and stable ownership structure for Virgin Blue to build on the rock provided by Richard Branson’s private investment company, and it is fair to say that his successor as CEO, John Borghetti, has the same passion.

Strategically, Virgin Blue now has a potent trans Tasman route alliance with Air New Zealand, as well as an Air New Zealand that will be represented on its board, and it has secured a valuable alliance with Abu Dhabi carrier, Etihad, and is pursuing a similarly pivotal relationship across the Pacific with the US giant, Delta.

Its new turbo-prop network alliance with Skywest is designed to compete at the regional level with Qantaslink.

All of these cards are now in play. Predicting who will play what hand is impossible, but each player has a strong balance sheet, valuable brands, and operates in growing markets.

The question is not so much what each will do, but who else might come to the table.

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