Jiml1126 From , joined Dec 1969, posts, RR: Posted (13 years 6 months 3 weeks 3 days 10 hours ago) and read 2298 times:
Virgin Blue Offers to Buy SIA's 25 PCT Stake in Air NZ
SYDNEY, Sept 7 Asia Pulse - Australian-based budget airline Virgin Blue has offered to buy Singapore Airlines' 25 per cent stake in Air New Zealand, leaving the Singapore carrier free to grab Ansett.
A spokeswoman for Virgin Blue confirmed today that the company had made the proposal to NZ Prime Minister Helen Clark's staff.
As well, a letter of intention on the proposal also was being sent to Australian Transport Minister John Anderson.
"It's a proposal that we put forward to the New Zealand government as an option for them to consider," she said.
She said as yet Virgin Blue had not received a response.
"It's very early days yet ... and I'm sure they've got a fair few things to consider at the moment."
She said the proposal would involve Virgin Blue taking over Singapore Airlines' stake in Air New Zealand, leaving Singapore Airlines free to take control of Ansett, if it saw fit to do so.
"Then you'd have Qantas (including Impulse)...as well, so there'd be three very viable and profitable airlines operating."
Earlier this week, British entrepreneur and Virgin founder Sir Richard Branson rejected a multi-million dollar offer from Air New Zealand's subsidiary Ansett to buy his discount airline.
He had rejected the Air New Zealand offer following strong support from a number of key politicians and the travelling public.
"Australians have benefitted dramatically since Virgin Blue cut airfares in half over 12 months ago," he said.
"Although we could have walked away with a $A250 million ($US130.38 million) net profit on our investment, I felt it would be selling out both the Australian public and our staff."
Air NZ needs around $A1 billion ($US521.5 million) in new equity to help fund a fleet replacement for its troubled Australian unit Ansett.
The Kiwi carrier said today that Ansett was losing about $A1.3 million a day at the earnings before interest, tax level.
In June, Singapore Airlines said it wanted to raise its current stake in Air NZ to 49 per cent from 29 per cent, and offered to buy the additional shares at $NZ1.31 each.
But today, Air NZ confirmed that Singapore Airlines was not interested in paying that amount, after sharp falls in the Kiwi group's share price.
That means that Air NZ remains in a difficult position, as it needs to raise money to fund a fleet upgrade at Ansett.
Its ability to do so has been constrained by delays by the NZ government over deciding whether to lift a 25 per cent cap on ownership in the Kiwi company by a single airline.