News
The guessing game for buyers of Air New Zealand’s holding in Virgin Australia continues
May 13th 2016
Qatar Airways said it is not interested in buying into Virgin Australia and Cathay Pacific Airways described the speculation as groundless contained in an Australian media report that said the airline was considering purchasing some or all of the 25.9% of the Australian airline owned by Air New Zealand (Air NZ). Read More »
The Australian Financial Review story suggested Cathay Pacific might place a bid for Air NZ’s stake in Virgin Australia to strengthen its presence in the Australian market.
“Cathay could use Virgin as a vehicle to add more flights to Hong Kong to skirt around a current capacity cap,” the report said, despite noting that any such move would likely be blocked by Singapore Airlines (SIA). Last month, SIA increased its shareholding in Virgin Australia from 22.91% to 23.11%. Two Chinese airlines, Hainan Airlines and China Southern Airlines, also have been reported to be talking to banks about a potential investment in Virgin Australia.
Qatar Airways CEO, Akbar Al Baker, told The Australian it was “good” Air NZ planned to exit Virgin. “No [we are not interested in Virgin Australia],” Al Baker said. “You know their (Virgin’s) results. I don’t know what their problem is, you would have to ask John Borghetti and you have to ask his shareholders what the problem is.”
Last week, Virgin Australia downgraded its full-year profit outlook and Credit Suisse warned that the carrier needed to raise as much as $1 billion in new capital to repair its balance sheet. This is approximately $700 million more than Virgin last month requested in loans from its shareholders.
