Kiwis to buy slice of Virgin Blue
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Kiwis to buy slice of Virgin Blue
Kiwis to buy slice of Virgin Blue
By Geoffrey Thomas
The Air New Zealand-Ansett group is moving to buy a stake in Virgin Blue from Sir Richard Branson's Virgin Holdings and expand the airline in Australia.
Airline management sources in Australia said Air NZ had already started negotiations with Sir Richard.
The deal would be done after the New Zealand Government decided between rival rescue bids for the NZ airline from Singapore Airlines and Qantas.
Air NZ hopes that NZ Cabinet will make a decision later this week or early next week on its preferred option for Singapore Airlines to increase its stake in Air NZ to 49 per cent but with only 35 per cent board control.
News of the Virgin Blue plan coincided with NZ Prime Minister Ms Helen Clark ruling out any Government rescue for Air NZ.
The Air NZ-Virgin Blue deal would be similar to Qantas's takeover of Impulse Airlines in May, which was merged into QantasLink, the airline's low fare operator.
Sir Richard was approached in May on a deal but had insisted that the name Virgin Blue remain, which had been a stumbling block for Air NZ.
Air NZ chief executive Mr Gary Toomey threatened at the time to start his own low-cost airline to combat Virgin Blue. But the position has changed significantly in the past two months with the fallout from the grounding of Ansett's aircraft at Easter continuing to tarnish Ansett's name and Virgin Blue proving to be a runaway success.
According to Mr Jean Louis Morisot, of Singapore-based Goldman Sachs, Virgin Blue has added pressure to Air NZ-Ansett to do a deal on its terms.
"Forays onto the notoriously treacherous Sydney-Melbourne market may represent an attempt by Sir Richard to extract better terms and price and maintenance of the Virgin band name in Australia," he said in a newsletter to clients.
Singapore Airlines also owns 49 per cent of Virgin Atlantic with the balance owned by Sir Richards' Virgin Holdings which controls Virgin Blue. The move on Virgin Blue will take yield pressure off Ansett and Qantas.
Virgin Blue would continue to offer low fares but at off-peak times and on new routes to holiday destinations in a similar manner to QantasLink, analysts said. One source at Ansett suggested Virgin Blue, with its much lower cost base, would be expanded to take over many of Ansett's unprofitable regional routes.
The West Australian
By Geoffrey Thomas
The Air New Zealand-Ansett group is moving to buy a stake in Virgin Blue from Sir Richard Branson's Virgin Holdings and expand the airline in Australia.
Airline management sources in Australia said Air NZ had already started negotiations with Sir Richard.
The deal would be done after the New Zealand Government decided between rival rescue bids for the NZ airline from Singapore Airlines and Qantas.
Air NZ hopes that NZ Cabinet will make a decision later this week or early next week on its preferred option for Singapore Airlines to increase its stake in Air NZ to 49 per cent but with only 35 per cent board control.
News of the Virgin Blue plan coincided with NZ Prime Minister Ms Helen Clark ruling out any Government rescue for Air NZ.
The Air NZ-Virgin Blue deal would be similar to Qantas's takeover of Impulse Airlines in May, which was merged into QantasLink, the airline's low fare operator.
Sir Richard was approached in May on a deal but had insisted that the name Virgin Blue remain, which had been a stumbling block for Air NZ.
Air NZ chief executive Mr Gary Toomey threatened at the time to start his own low-cost airline to combat Virgin Blue. But the position has changed significantly in the past two months with the fallout from the grounding of Ansett's aircraft at Easter continuing to tarnish Ansett's name and Virgin Blue proving to be a runaway success.
According to Mr Jean Louis Morisot, of Singapore-based Goldman Sachs, Virgin Blue has added pressure to Air NZ-Ansett to do a deal on its terms.
"Forays onto the notoriously treacherous Sydney-Melbourne market may represent an attempt by Sir Richard to extract better terms and price and maintenance of the Virgin band name in Australia," he said in a newsletter to clients.
Singapore Airlines also owns 49 per cent of Virgin Atlantic with the balance owned by Sir Richards' Virgin Holdings which controls Virgin Blue. The move on Virgin Blue will take yield pressure off Ansett and Qantas.
Virgin Blue would continue to offer low fares but at off-peak times and on new routes to holiday destinations in a similar manner to QantasLink, analysts said. One source at Ansett suggested Virgin Blue, with its much lower cost base, would be expanded to take over many of Ansett's unprofitable regional routes.
The West Australian
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Rudder I wouldnt look at it as VB desperately trying to raise funds,they are not in financial trouble. Seems though that there isnt a shortage of interested parties willing to sign up with VB.
It will be interesting to see how this one pans out.
It will be interesting to see how this one pans out.
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Eisle
Why wouldn't people want a slice of VB, it has the much the same qualities Impulse had to QF.
Much lower wage structure
Far less overheads
By owning part of them they will be able to control the aggresiveness of the prices slowly easing them back to reasonable levels, I don't think anyone would disagree AN has been hurt the most by VB entering the market. But where will they get the money to do this ?
The strange thing is Allegadly Sin****** Inc is one of the backers of VB. The same company that pumps billions into SIA. Why would they promate a start up of a budget carrier ? Only maybe to be bought out by ANZ which SIA is a 25% holder.
Shall be interesting times ahead
Why wouldn't people want a slice of VB, it has the much the same qualities Impulse had to QF.
Much lower wage structure
Far less overheads
By owning part of them they will be able to control the aggresiveness of the prices slowly easing them back to reasonable levels, I don't think anyone would disagree AN has been hurt the most by VB entering the market. But where will they get the money to do this ?
The strange thing is Allegadly Sin****** Inc is one of the backers of VB. The same company that pumps billions into SIA. Why would they promate a start up of a budget carrier ? Only maybe to be bought out by ANZ which SIA is a 25% holder.
Shall be interesting times ahead
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Air NZ have confirmed the interest in Virgin today. Watch for Air NZ to put off their announcement of the Air NZ result for about two weeks.They need the NZ cabinet decision, which is delayed, so they can decide on writedowns at Ansett.
