Emirates to pull out of Virgin Blue codeshare after Etihad deal

Emirates Airline is believed to be pulling out of a codeshare agreement with Virgin Blue, following the Australian airlines' decision to develop a partnership with Emirates' UAE rivals Etihad .

Qantas is also understood to be reviewing its position with Etihad following the surprise announcement last week of the extensive tie up between the Abu Dhabi carrier and the Virgin team.

Virgin Blue added salt in the wound this weekend by taking two A300 aircraft on lease which are currently in service with Emirates.

While no official announcements have been made, Virgin Blue Group CEO John Borghetti said: "We're in discussions with Emirates but it's very clear this link with Etihad is a very strong alliance.

"You have to choose your strategic partners and I think we've made our choice. But equally you've got to enact in a proper way to contractual commitments of other arrangements and that's what we're looking through at the moment."

Etihad Airways chief James Hogan met with Qantas last week and said: "What's important for both of us is we transition the right way to protect our customers."

Etihad and Qantas have been in partnership since March last year when Etihad codeshared on Qantas' domestic flights from Brisbane, Melbourne and Sydney as well as trans-Tasman services from Melbourne to Auckland. Qantas codeshared with Etihad from Australia to Abu Dhabi and onwards to destinations in the Middle East.

Borghetti, is a former Qantas executive general manager who according to Air Transport Intelligence had played a significant role in establishing the partnership.

Emirates has been a frequent-flyer programme partner with Virgin Blue.