Air New Zealand has acquired a "substantial shareholding" of Virgin Blue, though it has no plans to make a takeover bid for the Australian carrier.
"Air New Zealand has notified the Australian Stock Exchange and New Zealand Stock Exchange that it has become a substantial shareholder in Virgin Blue, as part of a planned acquisition of a shareholding between 10% and 14.99%," says Air New Zealand.
During a phone call today ANZ CEO Rob Fyfe told Virgin Blue CEO John Borghetti that there would not be a takeover bid. The New Zealand carrier has approval from Australia's Foreign Investment Review Board to buy up to 14.99% of Virgin Blue.
"The investment in Virgin Blue is part of Air New Zealand's strategy to develop scale and reach in this region," says Fyfe. "The Tasman alliance with Virgin Blue was the first step in this strategy. This investment cements the emerging relationship between our two airlines and demonstrates the confidence we have in Virgin Blue both as an entity and a partner for Air New Zealand."
Air New Zealand adds that it will make a further announcement about the stake purchase before the New Zealand and Australian stock exchanges open tomorrow.
In late December 2010 New Zealand approved the proposed trans-Tasman alliance between Air New Zealand (ANZ) and Virgin Blue, clearing the alliance's last regulatory hurdle.
Air New Zealand and Virgin Blue, which operates Pacific Blue Airlines, have agreed on minimum seat numbers to be operated across the Tasman Sea, which separates New Zealand and Australia, said New Zealand's Ministry of Transport.
On 16 December 2010 Australia's consumer watchdog, the Australian Competition and Consumer Commission (ACCC), granted the carriers "conditional authorization" for three years, though the carriers had sought five years.
Australia was originally opposed to the alliance. The ACCC rejected the alliance as recently as 10 September 2010, saying an alliance is not "more competitive" then Virgin Blue and Air New Zealand operating independently. The carriers appealed this decision.