Air New Zealand is increasing its stake in Virgin Australia, but says it has no intention of taking control of the airline.
Air New Zealand intends to take a further three per cent interest in Virgin Australia, raising its ownership level to 22.99 per cent.
The Foreign Investment Review Board and Australian Competition and Consumer Commission need to approve the move before it is finalised.
“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 John Borghetti and his team,” Air New Zealand said in a statement on Thursday.
“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.”
Richard Branson’s Virgin Group holds a 22.37 per cent stake in Virgin Australia, while Singapore Airlines has a 19.9 per cent interest.
The prospect of Air new Zealand holding a strong stake in a local airline will revive memories of its disastrous takeover of Ansett in 2000.
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It was a short-lived arrangement as competition from Qantas and new airlines Impulse and Virgin Blue made life tougher than the halcyon days of a two airline market with parallel scheduling.
Ansett staff numbers were already well paid and top-heavy and its fleet was ageing,
Air New Zealand tried to cut costs, but the impact was a loss of revenue after the fleet and service deteriorated.
It became so bad the fleet was grounded for Christmas that year and again in Easter 2001.
In early September 2001 the New Zealand government had to rescue Air New Zealand but cut Ansett adrift.
Air New Zealand placed the Ansett group of companies into voluntary administration on 12 September 2001, the day after the twin towers fell in New York.
Flights stopped two days later as still-confident Ansett employees showed up for work.
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Thousands of passengers were left stranded and more than 16,000 people found themselves out of a job, reportedly the largest mass job loss event in Australian history.
Some of those staff have found jobs at Virgin Australia.
The prospect of Air New Zealand becoming the new owner would rankle with many of them.
In other aviation news the Qantas Group has welcomed leading Hong Kong tourism, hospitality and property conglomerate Shun Tak as an additional investor in Jetstar Hong Kong.
Shun Tak will join founding investors Qantas Group and China Eastern Airlines, taking a 33.3 per cent share of the Hong Kong-based low cost carrier.
Qantas Group CEO Alan Joyce said Shun Tak is a well-established presence in the local market and has a range of tourism and travel interests that align well with Jetstar Hong Kong.
“This adds to the strategic partnerships we have across Asia with companies that have chosen to invest in the Jetstar brand,” Joyce said.
“There is clear potential for a local low cost carrier in Hong Kong to stimulate new travel demand, particularly given the proximity to mainland China and the ability to connect with existing parts of the Jetstar network.”
Jetstar Hong Kong’s application for regulatory approval is proceeding.
Since Jetstar Hong Kong was announced in March 2012, the airline has built up a local management team, started pilot and cabin crew recruitment and is well advanced in its Air Operators Certificate application.
The Qantas Group, which owns the Jetstar brand, has part shareholdings in three other Jetstar branded airlines in Asia – Singapore, Vietnam and Japan.
– With AAP
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