Air New Zealand announced last evening that it had acquired a substantial shareholding in Australian-based airline Virgin Blue.
Further shares were acquired off-market last night which increased Air New Zealand's relevant interest to 14.9%. The purchase of the shareholding was completed from existing cash resources.
Air New Zealand Chief Executive Officer Rob Fyfe has reconfirmed this-morning that there is no intention to go over 14.99%.
"This is simply an investment in Virgin Blue that reinforces Air New Zealand's strategy to grow its business in Australasia which is continually evolving as a single aviation market. The Tasman alliance with Virgin Blue was a key step in this strategy. This investment cements the important relationship between our two airlines and demonstrates the confidence we have in Virgin Blue and its management to grow their business both within the Tasman alliance and beyond the scope of the alliance," says Mr Fyfe.
"The investment provides us with an interest in the number two airline in Australia and, through this, access to the opportunities in the growing Australian domestic market. Air New Zealand has no intention of entering the Australian domestic market in its own right," said Mr Fyfe.
Mr Fyfe says Air New Zealand will not be seeking representation on the Virgin Blue Board for at least six months and notes that any representation would be a decision for the Virgin Blue Board and shareholders.
Air New Zealand's Chief Financial Officer Rob McDonald says the cost of entry into Virgin Blue is A$145 million or 44 cents per share.
Issued by Air New Zealand Public Affairs ph +64 21 747 320
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