Virgin Blue's planned expansion has hit turbulence as US and Australian regulators blocked a profit sharing deal with Delta Airways on trans-Pacific services, and with Air New Zealand on flights across the ditch.


And Virgin's biggest shareholder, Sir Richard Branson, is a very dark knight saying that Qantas has been allowed to strike deals with other airlines in similar partnership arrangements.


"We will be arguing very strongly that you can't allow the likes of Qantas to enter market alliances and deny smaller carriers a level playing field," he told BusinessDaily.


Qantas and South African Airways operate as a "single airline" on Indian Ocean flights, a move that was okayed by the ACCC.


Virgin now has to prove that the proposed arrangement is in the public interest. Sir Richard said that competition should be encouraged and not deterred.


"The regulators should want to see a strong Virgin Blue and a strong V Australia," he said.


"The fact that Qantas and South African Airways have been given permission to work effectively as one airline has made it almost impossible for V Australia to operate on that route.


"If they are saying we can't have partners on our routes and Qantas can have its partners on its routes then in simple language it is unfair.


"If Virgin Blue is damaged as a result, then I think the regulator will kick themselves one day because they ought to want to see us competing on the Pacific."


Editor's comment: Shouldn't the airline regulators be trying to help airlines who want to put on extra routes rather than obstructing them. Australia relies almost totally on airlines bringing the tourists in and Qantas has shown itself to be incapable of putting on enough routes and planes to fulfil that, so how can Virgin be penalised.....Interesting eh?