Virgin Australia is hoping its alliance with Air New Zealand will help turn a profit on its trans-Tasman services after reporting a loss of up to NZ$7.35 million for the year to June 2011 compared to the corresponding period last year.

According to a recent report released by the carrier, its New Zealand based subsidiary, Pacific Blue experienced a drop from NZ$19.8 million profit during the same 12 month period in 2010, The Sydney Morning Herald reported.

Despite the drop, the carrier remains positive that its business in New Zealand will pick up this year with a Virgin Australia spokesperson telling media that the carrier had experienced “strong improvement” since aligning with Air New Zealand last year.

Between the two carriers they now own more than 50 percent of the market share in New Zealand while Qantas and Jetstar carry a third and Emirates up to ten percent, according to the source.

As part of the agreement, Virgin Australia and Air New Zealand agreed to code share on flights across the Tasman as well as align other areas of business including frequent flyer programs and airport lounges.