flyingroo
Posts: 11
Joined: Fri Feb 23, 2007 9:13 pm

The Value Of Minority Shareholdings In Airlines

Tue Jul 10, 2007 7:13 pm

With reports of SQ looking to sell its 49% holding in VS I'm posing the question, to what extent is the value of minority holdings in airlines (by other airlines)?

Other than usually booking a substantial profit for the selling carrier coupled wit the yearly profit/dividend distribution from the shareholding, is there any other real gain from these investments for the investing airline?

With the recent sale/announcement of sale of minority shareholdings by airlines (BA/QF, SAS/BD, QF/NZ just to name a few), are airlines coming to the conclusion that without control of the other airline, their money and efforts are better spent concentrating on their own operations, or have some investments actually proven to be beneficial to the holding airline?
 
bill142
Posts: 7853
Joined: Wed Aug 04, 2004 1:50 pm

RE: The Value Of Minority Shareholdings In Airlines

Tue Jul 10, 2007 8:59 pm

It's not always about making money on the investment. The investment may be seen as a precursor to a full take over in the future should the investor see sufficient reason to. The one airline might be looking at feeding traffic from a smaller airline, but may not be able to unless some investment capital is provided. There are a whole range of strategic reasons why an airline might invest in another airline.
 
VS11
Posts: 877
Joined: Mon Jul 02, 2001 6:34 am

RE: The Value Of Minority Shareholdings In Airlines

Thu Jul 12, 2007 3:47 am

In the case of SQ taking a stake in VS, SQ was hoping to benefit from a market that it could not on its own participate in.