Air New Zealand took its stake in Virgin Blue(owners of V Australia and Virgin Australia) to 19.9% as a result of a fairly low share prices.The last time they took an interest in an Australian airline (Ansett), it almost bankrupted Air New Zealand and the Australia’s longest running domestic carrier Ansett ceased to exist.
Ten years later, Air New Zealand are hopefully wiser and Virgin are a better business than Ansett Australia were. Former chief executive Rod Eddington “described Ansett publicly and internally as a great airline, but a poor business”.
It makes huge sense for Air NZ to have a strong relationship with an Australian carrier. The tie ups with V mean passengers can flow into and out of the Australian and New Zealand markets and Air NZ international routes.
I believe it would also make sense for Virgin Australia to join the Star Alliance network just as Ansett was a member. They made overtures to SkyTeam via Delta.
I am curious to see Virgin-Air NZ future plans.
They are clearly out to compete heavily with Qantas domestically with new lounges, business class, ramped up frequent flyer program
I am less sure of what the plan is for V Australia, their international arm, after they come in under the Virgin Australia banner in 2012. Flights to Phuket and South Africa were halted. Fiji is off the cards and China seems on hold. Qantas is ramping up Asian expansion. Will Virgin focus on Middle east or Asia?
Virgin Australia are losing money. At what point will their backers say “enough is enough”
What interest will Singapore Airlines take in the whole project? They tried to take over Ansett. They have made no secret of wanting to fly Australia-USA and have been blocked continually. Their investment in Tiger Airways Australia to my mind has been a debacle. Singapore now have an alliance with Virgin Australia. Would they be interested in owning a share of a full service Australian airline especially if it gave them access to the USA? Singapore also own 49% of Virgin Atlantic. The other 51% of Virgin Atlantic is owned by the Virgin Group who own 25% of Virgin Australia. A Singapore-Air NZ-Virgin combination would be a formidable force.
In the meantime, an ex Virgin executive has gone to Tiger.
As always, the Australasian airline scene remains interesting.
Leave a Reply