NZ increases stake in Va to 22.99% [Now to 25.99%]

Status
Not open for further replies.

markis10

Veteran Member
Joined
Nov 25, 2004
Posts
30,855
Qantas
LT Gold
Virgin
Red
Oneworld
Sapphire
http://www.asx.com.au/asxpdf/20130606/pdf/42gb4f4jhqvykg.pdf

Air New Zealand has entered into an agreement to acquire a further 3% of the shares of Virgin
Australia, taking its interest to 22.99%. The agreement is subject to customary Foreign
Investment Review Board (FIRB) and Australian Competition and Consumer Commission
(ACCC) conditions and Air New Zealand has filed the required Substantial Shareholder Notice.

Air New Zealand will consider acquiring up to a further 3% of the shares in Virgin Australia, to
the extent it is permitted to do so under the Australian Corporations Act and has
made an application toFIRB on that basis.


Interesting quote that will no doubt find its way onto JBs CV:


The additional interest affirms Air New Zealand’s strong belief and confidence inVirgin Australia and the strategy it is pursuing under the leadership ofJohn Borghetti and his team


 
I really wish NZ would leave VA alone. To me they proved their worth during the Ansett saga.

It's funny to see that a free market airline is being bought up by airlines whose majority shareholders are their respective governments.
 
I wonder how Etihad is feeling now ;)

Also, where'd they buy the extra 3% from, is this from Branson? He would seem to be getting rid of his stock ;)
 
I really can't see Etihad being too bothered by NZ. It's SQ whose interests overlap with theirs and would worry them more.
 
So... if I'm correct does this now make it 22.99% NZ; 19.9% SQ and EY 10%?

Enough of this foreplay, when will the *A owners hurry up and sponsor VA into the program?
 
I really wish NZ would leave VA alone. To me they proved their worth during the Ansett saga.

It's funny to see that a free market airline is being bought up by airlines whose majority shareholders are their respective governments.

I think you'll find that it was the Australian government who screwed that one up. :) At the end of the day, having 22.99% investment is a better proposition than the 100% they had in Ansett
 
I read a different article that said they can only increase their ownership at 3% every 6 months (I think was the length of time) under creep rules? So potentially at the end of the year they could increase their stake to 25.99%... and so forth, until they hit the maximum they can have or all shares are exhausted.
 
AirNZ TO lift its stake in Virgin Australia to 25.99&

Air New Zealand can buy 6 per cent more of Virgin... | Stuff.co.nz
Days after reauthorising Air New Zealand's trans-Tasman partnership with Virgin Australia, the Australian Competition and Consumer Commission has paved the way for the national carrier to lift its stake in Virgin Australia to 25.99 per cent.
Air New Zealand welcomed the ACCC's announcement not to oppose its bid to acquire a further 6 per cent stake of Virgin Australia.
The Australian agency ruled the potential increased share would not materially affect competition in any market.
"It would not provide Air New Zealand with the ability to control or materially influence Virgin or significantly affect Air New Zealand's incentives to compete with Virgin," ACCC Commissioner Jill Walker said.
...
 
Re: AirNZ TO lift its stake in Virgin Australia to 25.99&

Surely Air NZ will now demand a board seat. It (and the other carriers mentioned above) all lack one at present if I recall.

One media outlet implied that VA was a 'plaything' for NZ, EY and SQ in the sense that VA's destiny was what these major shareholders wanted. It is odd that none have direct board representation.

NZ's recent financial results on a per passenger or per $ of revenue basis were far more impressive than either VA or QF's. It is more difficult to compare EY and SQ's results to VA because of the three, only VA flies domestically and as others allude to, EY in particular may receive special treatment from its owners in terms of fuel price subsidies. QF and competitor international airlines used to subtly allege this about EK but QF and EK are now 'together' so any such whispers stopped.
 
Read our AFF credit card guides and start earning more points now.

AFF Supporters can remove this and all advertisements

Re: AirNZ TO lift its stake in Virgin Australia to 25.99&

samh - Correct 3% creep every 6 months, is an exception to the rule that you have to make a general takeover offer once over 20%.
Airlines a little different as you also have the FIRB requirements.

However with all these foreign owners, I am amazed that they are still allowed to fly internationally under an AU flag
(nb. there is a legal structure that the Intl airline has different owners to the rest of the airline, yet it is all managed as one and trades as one)
 
Re: AirNZ TO lift its stake in Virgin Australia to 25.99&

However with all these foreign owners, I am amazed that they are still allowed to fly internationally under an AU flag
(nb. there is a legal structure that the Intl airline has different owners to the rest of the airline, yet it is all managed as one and trades as one)

Foreign ownership on the international operations is still under 49% as required.

Personally if people want to actually invest money into something as money-losing and capital-return poor as an airline, I don't care where they are from, as long as its not my superannuation money.
 
Re: AirNZ TO lift its stake in Virgin Australia to 25.99&

SS,
I understand legally that is the case.

However if you look at the VAH (the traded share) presentation from last month, International is reported on pg 7, just after Domestic on pg 6, with no notes that International is owned by different people.
Same in the prelim results.

Whereas if you actually buy a share (of the few available) of VAH today, my understanding is you don't own the International operations
 
Re: AirNZ TO lift its stake in Virgin Australia to 25.99&

NZ's recent financial results on a per passenger or per $ of revenue basis were far more impressive than either VA or QF's.

But aren't they the only carrier in NZ, so if you want to get around you really have no other choice? Of course they'd do well in such a scenario.

Personally if people want to actually invest money into something as money-losing and capital-return poor as an airline, I don't care where they are from, as long as its not my superannuation money.

Hypothetically, these airlines taking stakes and creating a price war with Qantas leads both VA and QF to unprofitability. If they managed to keep both unprofitable for long enough, they'd both probably fall and those 3 'outside' airlines (among others) would be the winners internationally. Domestically who knows.

EY, SQ and NZ don't ever need to see a return if it forces QF into the red. That's the real issue.
 
Re: AirNZ TO lift its stake in Virgin Australia to 25.99&

SS,
I understand legally that is the case.

However if you look at the VAH (the traded share) presentation from last month, International is reported on pg 7, just after Domestic on pg 6, with no notes that International is owned by different people.
Same in the prelim results.

Whereas if you actually buy a share (of the few available) of VAH today, my understanding is you don't own the International operations

I think that is driven by the accounting standards and their definition of control. At the extreme, you can have 0% interest in the financial results of something, but consolidate it if you control it 100% operationally. Which is the case with Virgin's International operations - 100% managed operationally by Virgin Australia.
 
Re: AirNZ TO lift its stake in Virgin Australia to 25.99&

Which is somewhat misleading to a shareholder'/ potential shareholder reviewing the financial results.
 
Re: AirNZ TO lift its stake in Virgin Australia to 25.99&

Which is somewhat misleading to a shareholder'/ potential shareholder reviewing the financial results.

I don't think the new Virgin structure splitting Domestic and International was ever going to be easy to understand from a financial results perspective. Will be interesting when their full year accounts come out to see how it is described.
 
Enough of this foreplay, when will the *A owners hurry up and sponsor VA into the program?

Does a new member joining *A have to be unanimously approved by the current *A members? Because it's hard for me to see United approving VA's entry into *A, given that 82% of VA's own metal long haul capacity (14/17 weekly flights) is part of a joint venture (with Delta) which competes directly with UA. (There's no way UA would get antitrust immunity to stop competing with VA/DL and QF/AA and join the VA joint venture even if they wanted to.) And SQ and NZ aren't nearly as invested in Star Alliance as Delta is in Sky Team -- I don't think either have any joint venture agreements with any *A members. Thus, Sky Team seems much more likely to me than *A, though I don't think either are very likely in the short term.
 
Status
Not open for further replies.

Become an AFF member!

Join Australian Frequent Flyer (AFF) for free and unlock insider tips, exclusive deals, and global meetups with 65,000+ frequent flyers.

AFF members can also access our Frequent Flyer Training courses, and upgrade to Fast-track your way to expert traveller status and unlock even more exclusive discounts!

AFF forum abbreviations

Wondering about Y, J or any of the other abbreviations used on our forum?

Check out our guide to common AFF acronyms & abbreviations.
Back
Top