Air NZ ups stake in Virgin Australia

Air New Zealand has entered into an agreement to acquire a further 3% of Virgin Australia, taking its total interest to 22.99%.

The agreement is still subject to approval by Australia’s investment and competition regulators, but the Auckland-based national carrier called the process “customary” and said it is also considering purchasing further 3% in Virgin Australia, potentially boosting its ownership to almost 26%. It has already filed its application with the Australia’s Foreign Investment Review Board (FIRB) with a view making the increased offer.

It added however that it has no plans to launch a complete bid for Virgin Australia.

“Air New Zealand is not seeking a position on the Board of Virgin Australia nor does it have the intention of obtaining control of Virgin Australia,” Air New Zealand said in a statement.

“The additional interest affirms Air New Zealand’s strong belief and confidence in Virgin Australia and the strategy it is pursuing under the leadership of [CEO] John Borghetti and his team.”

Air New Zealand purchased its original 14.99% stake for AU$145 million (US$140m) in January 2011. In April 2013, Singapore Airlines agreed to almost double its stake in Virgin Australia to 19.9%.