IN A synchronised move, Singapore Airlines (SIA) has acquired a 10 per cent stake in Virgin Australia Airlines for US$108.8 million, while the latter has secured a 60 per cent share in SIA subsidiary Tiger Airways Australia for US$36.2 million.
Virgin Australia is now co-owned by founder & president Richard Brandson (26 per cent), Air New Zealand (19.9 per cent), Etihad Airways (10 per cent) and SIA (10 per cent), with the remaining 34.1 per cent publicly listed on the Australian Stock Exchange. SIA also has a 49 per cent share in Branson’s Virgin Atlantic Airways.
The development comes almost one-and-a-half years after the two airlines inked a partnership agreement during the IATA 67th AGM and World Air Transport Summit in Singapore (TTG Asia e-Daily, June 7, 2011).
Since then, Virgin Australia has transformed from a low-cost into a full-service carrier. However, the airline’s unexpected investment in Tiger Australia means it has re-emerged in the LCC arena to take on Jetstar Airways, which is owned by arch rival, Qantas Airways.
Virgin Australia and SIA plan to grow Tiger Australia’s current fleet of 11 Airbus A320 aircraft to 35-strong by 2018.
SIA CEO, Goh Choon Phong, said: “This major development demonstrates the importance and strength of the partnership between our two airlines, and our shared commitment to an alliance that provides a wide range of consumer benefits. With this development, there is no doubt that SIA and Virgin Australia intend to be alliance partners for the long haul.”
Virgin Australia CEO, John Borghetti, said: “This transaction allows Virgin Australia to access the budget market, and enables Tiger Airways Australia to expedite its growth, providing greater competition in this important market segment.”
Meanwhile, Virgin Australia has made a US$101.9 million takeover bid for Skywest Airlines, a regional carrier based in Perth, Western Australia.
