Home » Aviation »Headline News » Currently Reading:

Air NZ confirms it may sell out of Virgin Australia

March 31, 2016 Aviation, Headline News No Comments Print Print Email Email

egtmedia59In a dramatic series of moves yesterday, Virgin Australia’s biggest shareholder, Air New Zealand, disclosed that it is considering selling some or all of its 25.9% stake in the Aussie carrier.

Air New Zealand’s chief executive, Christopher Luxon, resigned from Virgin Australia’s board immediately as a result of the momentous announcement.

When a shareholder with over a quarter of a company’s shares makes an announcement like that, it creates ripples. Trading in Virgin Australia shares was halted and that airline’s shares dived 8% when trading re-commenced.

Air New Zealand is retaining First NZ Capital and Credit Suisse to advise it on options with respect to its Virgin stake, ABC News reported yesterday.http://recruitment.travelcounsellors.com/au/?utm_source=eGlobal&utm_medium=banner&utm_campaign=Its%20time

The broadcaster reported that Air New Zealand “looks determined to at least substantially reduce its holding” in Virgin Australia.

Rather than keeping a large minority holding in Virgin Australia, Air New Zealand has its own growth opportunities to pursue. If it released the funds locked up in its Virgin Australia shareholding, it would have plenty of other uses for the money.

The New Zealand flag carrier, highly profitable, recently launched service to South America. It operates nonstop service to five North American destinations from Auckland, including daily flights to San Francisco, twice-daily flights to Los Angeles, and five weekly flights to Houston.

Luxon said Air New Zealand would remain a close partner of Virgin Australia operationally, regardless of the shareholding.

Other minority shareholders in Virgin Australia are Singapore Airlines and Etihad.

As the Sydney Morning Herald pointed out, even if Air New Zealand exits its stake in Virgin Australia at a significant loss, investors can rest assured it won’t be as disastrous as Air New Zealand’s previous Australian investment: Ansett.

“That one went so well it required a massive bailout by the Kiwi government when Ansett collapsed in September 2001,” the Herald remarked.

Written by Peter Needham

Comment on this Article:

Time limit is exhausted. Please reload CAPTCHA.

Platinium Partnership


Elite Partnership Sponsors


Premier Partnership Sponsors


Official Media Event Partner


Global Travel media endorses the following travel publication