Air NZ hoses down Virgin Blue share report

Photo / Paul Estcourt

Air New Zealand is quashing reports that is poised to take a cornerstone stake in rival airline Virgin Blue.

The Sydney Morning Herald today said the move was seen as a way for this country's national carrier to cement its relationship with Australia's second-largest airline.

Aviation industry sources said Air New Zealand wanted to buy up to 15 per cent of Virgin Blue, after the airlines appeared to have won indicative support from regulators for a proposed joint venture on services between New Zealand and Australia, the SMH reported.

Air NZ has this morning issued this statement:

"Commenting on media speculation, Air New Zealand advises it has not purchased any shares in Virgin Blue. Any such purchase would require FIRB approval in accordance with the Australian Government Policy on foreign investment due to the substantial ownership of Air New Zealand by the New Zealand Government.

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 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. A final decision on the alliance is expected by the end of the year.

As a listed company on ASX and NZX, Air New Zealand is conscious of its market disclosure obligations and in the event of any such investment would advise the market in accordance with those obligations. Air New Zealand will make no further comment in regard to this speculation."

A strategic stake was seen as giving Air New Zealand a foot in the door for the next wave of consolidation in the aviation industry, which was emerging from one of its worst downturns. Virgin Blue and Qantas were often seen as likely candidates in the longer term for tie-ups with airlines in the burgeoning Asian market.

- NZPA / NZ HERALD