Green light for Air NZ to lift Virgin stake

Air New Zealand has agreed to a share purchase that will lift its stake in Virgin Australia by 3 per cent to 22.99 per cent. Photo / Getty Images
Air New Zealand has agreed to a share purchase that will lift its stake in Virgin Australia by 3 per cent to 22.99 per cent. Photo / Getty Images

Air New Zealand has received approval to lift its stake in airline Virgin Australia to nearly 26 per cent.

The Australian Competition and Consumer Commission (ACCC) has concluded that Air New Zealand's proposed acquisition of Virgin Australia shares would not likely result in a substantial lessening of competition in any market.

"It would not provide Air New Zealand with the ability to control or materially influence Virgin or significantly affect Air New Zealand's incentives to compete with Virgin," ACCC Commissioner Jill Walker said.

Air New Zealand has agreed to a share purchase that will lift its stake in Virgin Australia by 3 per cent to 22.99 per cent.

It is also considering a purchase of another 3 per cent stake that would extend its position as the airline's largest shareholder.

Singapore Airlines, Etihad Airways and Richard Branson's Virgin Group are Virgin Australia's other major shareholders.

Air New Zealand has previously said it was not seeking a position on the board of Virgin Australia, and had no intention of obtaining control of Virgin Australia.

It also said it still required approval from the Foreign Investment Review Board for each new share purchase.

Earlier this week, the ACCC gave the green light for a transtasman airline alliance between Virgin Australia and Air New Zealand to continue for another five years.

The ACCC said the alliance of their respective domestic networks would allow the airlines to offer enhanced products and services, such as new frequencies and increased access to loyalty programme benefits.

- AAP

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