SIA rules out majority stake in Virgin Australia

SINGAPORE — Singapore Airlines (SIA) said yesterday that it has not considered buying a majority stake in Virgin Australia, adding that it preferred seeing the Australian carrier remain independent.

Speculation has been rife in recent months over SIA’s intentions for Virgin Australia, following Air New Zealand’s announcement of plans to sell its 25.9 per cent stake in the carrier.

“SIA wishes to put on record that it has not contemplated taking a majority stake in Virgin Australia,” said SIA spokesman Nicholas Ionides. “SIA’s interests in the Australian market — as well as in Virgin Australia itself — are best served through an independent Virgin Australia.”

Last month, SIA CEO Goh Choon Phong described the Australian market as “very important”. He said Virgin Australia was “commercially very important”, partly because the airline could reach remote parts of Australia more easily than SIA.

SIA, which uses its Changi Airport hub to connect passengers to China and South-east Asia, has benefitted from the Virgin Australia partnership by tapping corporate flyers and reaching Australia’s domestic market.

Chinese companies strengthened their grip on Virgin Australia earlier this month, with Nanshan Group saying it would buy about 20 per cent of Virgin Australia from Air New Zealand. This came after HNA Group, the owner of Hainan Airlines, last month said it planned to buy 13 per cent of Virgin Australia.

If the deal is approved, Nanshan Group will hold almost as much as the other partners.

SIA currently has a 20.09 per cent stake in Virgin Australia. It recently committed to supporting the Australian airline’s A$852 million entitlement offer that could increase its stake to 25.9 per cent, should other shareholders not take up their entitlements.

“SIA and Virgin Australia have an extensive commercial partnership that has gone from strength to strength over the past five years, providing many consumer benefits. SIA is confident of the long-term prospects of Virgin Australia and is committed to supporting its long-term growth,” said Mr Ionides. With agencies