Singapore Airlines is seen as a possible buyer of Air New Zealand's 25.9 per cent stake in Virgin Australia if it opts to sell out.
Air New Zealand is considering a sale of the shareholding, spurred by its reluctance to keep chipping in to support the highly geared Australian carrier and a feeling that Air NZ's investment is out of proportion to its size.
Analysts at Morningstar say the combined equity and debt investment of $563 million compares to Air New Zealand's total asset base of $7.2 billion and equity of $2 billion.
Air New Zealand bought into Virgin as a way of securing its joint venture on the transtasman route at a time of a possible threat from Singapore Airlines' Australasian ambitions.
Singapore and Etihad later also bought in to Virgin.
Since then, Air New Zealand and Singapore have cemented a strong relationship.
Deutsche Bank says Virgin's structure allows for the two other airline shareholders to buy the Air New Zealand stake.
"Singapore Airlines in particular could be interested in a controlling stake if they can also gain access under the Service Agreement to operate the international operations -- particularly those operating on the Pacific routes."
Air New Zealand is keen to sell, but not at any price.
After the possible sale was announced, Morningstar said it would not be surprised if Air New Zealand accepted a lower price than the shares' estimated fair value of A44c.
This week they have been trading around A35c.
Qantas called a truce in the damaging capacity battle with Virgin two years ago, and chief executive Alan Joyce says its rival had struggled in the low cost end of the sector and had been forced to move upmarket.
"We'll plough on with what we're doing because we know it's working," he says.
Qantas, which has lobbied against foreign airlines buying into Virgin, wanted a "sensible, stable economic market where everybody has the same rules," he says.
"We have have to make sure that this is the framework going forward and we'll be making that case out to the relevant parties."