Air New Zealand is reportedly looking to sell all or part of its 25.9 per cent stake in Virgin Australia.
The news follows some management disputes, which saw Air NZ chief executive Christopher Luxon resigning from the Virgin Australia board last month after failing to oust current Virgin boss John Borghetti.
Air New Zealand seeks to relinquish its stake in Virgin Australia
According to the Centre for Aviation (CAPA), Singapore Airlines (SIA), which already has a 23.1 per cent stake in Virgin, is viewed as the most likely candidate to take over Air NZ’s shares given the strategic importance of Australia’s domestic market to SIA’s business (see here).
However, under Australian law, any existing shareholder who owns more than 20 per cent of Virgin Australia (but below 90 per cent) cannot automatically increase its holding. If SIA intends to acquire Air NZ’s existing stakes in Virgin, it would have to do so with a full takeover of the airline.
SIA does have the required US$1.5 billion funds to purchase, delist and recapitalise Virgin Australia, reports CAPA. A takeover bid would be consistent with recent moves by the Star Alliance member, such as the full integration of Tigerair into the SIA Group (see here).
A takeover would strengthen the group's presence in Australia, as it would enjoy full control over Virgin Australia – allowing it to streamline operations for the benefit of customers connecting from the group's parent airline.
For more information, visit virginaustralia.com, airnewzealand.com and singaporeair.com
Clement Huang
Air New Zealand seeks to relinquish its stake in Virgin Australia
According to the Centre for Aviation (CAPA), Singapore Airlines (SIA), which already has a 23.1 per cent stake in Virgin, is viewed as the most likely candidate to take over Air NZ’s shares given the strategic importance of Australia’s domestic market to SIA’s business (see here).
However, under Australian law, any existing shareholder who owns more than 20 per cent of Virgin Australia (but below 90 per cent) cannot automatically increase its holding. If SIA intends to acquire Air NZ’s existing stakes in Virgin, it would have to do so with a full takeover of the airline.
SIA does have the required US$1.5 billion funds to purchase, delist and recapitalise Virgin Australia, reports CAPA. A takeover bid would be consistent with recent moves by the Star Alliance member, such as the full integration of Tigerair into the SIA Group (see here).
A takeover would strengthen the group's presence in Australia, as it would enjoy full control over Virgin Australia – allowing it to streamline operations for the benefit of customers connecting from the group's parent airline.
For more information, visit virginaustralia.com, airnewzealand.com and singaporeair.com
Clement Huang 
