25 Apr 2013

Singapore Airlines lifts stake in Virgin

8:46 am on 25 April 2013

Singapore Airlines has increased its stake in Virgin Australia to 19.9%, paying $A123 million for additional shares.

AAP reports it has acquired 255.5 million shares in Virgin Australia from the Virgin Group at 48 Australian cents per share, for a total of $A122.6 million.

Singapore Airlines acquired 10% of Virgin Australia in late 2012 through an injection of funds in Virgin Australia.

The two airlines entered into a long-term partnership in 2011, encompassing codesharing, reciprocal frequent-flyer program benefits and lounge access, co-ordinated schedules, and joint sales, marketing and distribution activities.

AAP reports the purchase is subject to approval from Australia's Foreign Investment Review Board.

Air New Zealand holds a stake of about 19% in Virgin Australia and Etihad Airways has about 10%.

Kimber Capital head of research Greg Fraser said Singapore Airlines wants to have a bigger say in how Virgin Australia develops.

He said Singapore Airlines wanted to ensure that a large amount of international travellers going between Australia and Asian destinations travel via the Singapore Airlines/Virgin Australia Alliance.