Air NZ denies imminent Virgin stake sale
Air New Zealand has hosed down speculation of an imminent sale of its 25.9 per cent stake in Virgin Australia to Singapore Airlines or another party.
A report in The Australian on Wednesday suggested Air NZ chief executive Christopher Luxon and Virgin chief executive John Borghetti had “cleared their diaries this week” in order to finalise the sale of the stake by the weekend.
Air New Zealand chief executive Christopher Luxon has no international travel plans this week. Photo: Simon Watts
Mr Luxon was said to have cancelled appointments to take a last-minute trip overseas.
However, an Air NZ spokeswoman said the report was incorrect. “For the record, Christopher is in New Zealand for the rest of the week,” she said.
It is understood Mr Borghetti has not cleared his diary as was suggested.
Singapore Airlines, for its part, has spent this week hosting Australian Capital Territory politicians and journalists in Singapore to promote its upcoming flights to Canberra.
Singapore Airlines is viewed by aviation industry experts as the most likely buyer of Air NZ’s stake, which would then require it to make a takeover offer for the remainder of the airline.
Delta Air Lines, a trans-Pacific alliance partner of Virgin this week said it was not currently considering the purchase of a stake in Virgin but had not ruled out buying shares in the future.
United Airlines, which has also been pointed to as a potential interested party, on Wednesday said it had no comment on the matter.
As for Singapore Airlines, its ability to use Virgin as a vehicle for international service expansion remains unclear.
Virgin’s international arm remains majority Australian owned and has a separate board from the domestic arm to comply with the Air Navigation Act and maintain its bilateral service rights.
Deutsche Bank analyst Cameron McDonald this week said he believed Singapore Airlines could be interested in a controlling stake in Virgin “if – and that’s a big if – ” it could also gain access to operate the international operations, particularly on trans-Pacific routes.
If Singapore Airlines made a takeover offer for Virgin, it will require the support of the Foreign Investment Review Board and Federal Treasurer Scott Morrison. Qantas Airways’ objections to a deal could centre around the control of the international operations. It is possible conditions could be imposed.
Singapore Airlines has previously failed in attempts at lobbying the government to allow it to fly its own aircraft between Australia and the United States.
In January, Singapore Airlines chief executive Goh Choon Phong said his airline remained interested in the trans-Pacific route although not on an urgent basis.