Air NZ scotches report it would buy Virgin shares

Air NZ scotches report it would buy shares in Virgin Blue as part of alliance

July 16 (BusinessDesk) - Air New Zealand Ltd. said its proposed alliance with Virgin Blue, aimed at cutting costs on the intensely competitive Tasman routes, will not involve it buying shares in the Australian airline.

Fairfax Media cited unnamed aviation industry sources as saying the national carrier wanted to buy up to 15% of the shares of Virgin Blue as part of a revenue-sharing accord on the Tasman. The two airlines ‘appeared to have won’ indicative support from regulators in Australia and New Zealand for their plan, it said.

Air New Zealand “advises it has not purchased any shares in Virgin Blue” and any such move would require signoff from Australia’s Foreign Investment Review Board, it said in a statement.

“Air New Zealand is conscious that airline alliances such as the one planned with Virgin Blue frequently include an equity aspect, but the proposed alliance does not do so,” the carrier said.

“The necessary regulatory approvals for the trans-Tasman alliance are still in process and Air New Zealand has had no indication of the outcome of this decision,” it said, adding that it expects a final decision by the end of the year.

(BusinessDesk)

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