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Virgin Australia awaits outcome of shareholders and international network
August 2nd 2019
CEO Paul Scurrah may see HNA transfer its stake to Turkish Airlines. Read More »
Turkish Airlines has been named a potential buyer of HNA’s stake in Virgin Australia. This highlights how new Virgin CEO Paul Scurrah must re-evaluate the airline’s international network and potentially re-position it to reflect Virgin’s shareholders. This adds to Scurrah’s significant task of determining the future business model for Virgin’s core domestic presence.
Turkish is one of a few companies in unspecified sectors considering a purchase of HNA’s 20% stake in Virgin, according to a Bloomberg report citing sources. Neither Turkish nor HNA had comment.
HNA’s exit from the Virgin share registry could see Virgin re-consider its flights to Hong Kong, Virgin’s only presence in Asia aside from leisure services to Bali. The Hong Kong flights are in partnership with HNA and need feed from HNA’s local unit, Hong Kong Airlines.
A new airport in Istanbul is allowing Turkish to step up growth while improving the passenger experience there. Turkish does not serve Australia but has mooted service over the years. While Turkish has a superior network in Europe compared to Gulf carriers, its Istanbul hub is further west than Gulf hubs. That challenges non-stop Istanbul-Australia flying.
Turkey’s air service agreement with Australia is far more limited compared to the extensive traffic rights available to Emirates, Etihad and Qatar Airways. That should ultimately restrict Turkish’s presence in Australia. Qantas has been lobbying against Qatar receiving more traffic rights. Without a large presence in Australia or need to park cash, there are unclear strategic benefits to Turkish.
