New Zealand Aviation NEWS: Air NZ grabs stake in Virgin Blue

Air New Zealand became “a substantial shareholder” in Australia’s Virgin Blue Group, having recently formed a trans-Tasman alliance with its former rival.
The Kiwi carrier notified the Australian and New Zealand Stock exchanges that it had taken a stake of more than five per cent in Virgin Blue as part of a planned acquisition of a shareholding of 14.99 per cent.
Air New Zealand has paid A$145 million, or 44 cents per share, for this shareholding which was completed with Air New Zealand’s current cash resources.
Air New Zealand, which is majority owned by the New Zealand Government has obtained Australian Foreign Investment Review Board approval to purchase the Virgin Blue stake, a shareholding which would keep the total foreign ownership of Virgin Blue within the statutory limit of 49 per cent.
Sir Richard Branson’s Virgin Group holds 26 per cent of the Virgin Blue Group’s stock.
Air New Zealand chief executive Rob Fyfe released a statement after the market closed saying his airline had no intention of making a takeover bid for Virgin Blue and that he had told Virgin Blue’s chief executive this in a telephone call.
The investment in Virgin Blue is part of Air New Zealand’s strategy to develop scale and reach in this region. The Tasman alliance with Virgin Blue was the first step in this strategy.
“This investment cements the emerging relationship between our two airlines and demonstrates the confidence we have in Virgin Blue both as an entity and as a partner for Air New Zealand,” Fyfe said.
Virgin Blue CEO John Borghetti welcomed Air New Zealand as a shareholder and said the tie-up with Air New Zealand was a key part of the group's strategy to build an international network, alongside its core local business.
"We see this as an endorsement to our game change program," he said.
Now we will have to wait and see what the ACCC thinks of the move - and whether it will have any influence on the regulator's view of the alliance between the two airlines, an alliance that has already received qualified approval from the ACCC..

NEHA JAIN

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