Singapore Airlines Ups Its Stake In Virgin Australia
Singapore Airlines has announced that it will be upping its stake in Virgin Australia. Singapore Airlines is Southeast Asia’s largest carrier and its increased stake and thus deepened alliance with Virgin Australia means it is in a much stronger position to take on the dominance of Qantas Airways in the local market.
READ THE APRIL EDITION OF BUSINESS REVIEW AUSTRALIA HERE
According to and email statement release by the company, Singapore Airlines will buy 255.5 million Virgin Australia shares, which are owned by Virgin Group for A$122.6 million (48 Australian cents per share). The investment will see Singapore Airlines stake in Virgin increase from 10 percent to 19.9 percent.
Collaborating to Take on the Competition
Qantas currently dominates the local market, with a 65 percent control over the domestic travel industry; it’s thought that Singapore Airlines and Virgin Australia are strategically widening their alliance to eat into that dominance. Furthermore, Virgin Australia received approval to buy 60 percent of the local unit of Tiger Airways yesterday, no doubt ruffling Qantas feathers even more.
It has been widely reported that Virgin Australia Chief Executive Officer John Borghetti is targeting corporate customers with business class seats and upgraded lounges as part of his strategy to take on Qantas.
Virgin Australia advanced as much as 2.2 percent to 46.5 cents, and traded at 46 cents as of 11:29 a.m. in Sydney. Singapore Air fell 0.4 percent to S$10.61 in the city. The acquisition will depend on approval from Australia’s Foreign Investment Review Board.
Read Related Articles In Business Review Australia
- Top 10 airlines in Asia for excellent customer satisfactionLeadership & Strategy
- Singapore Airlines and Alibaba join forces to improve customer experience for travellersTechnology
- Singapore Airlines to offer scheme for frequent flyersLeadership & Strategy
- Temasek to crack down on corruption in its portfolioLeadership & Strategy
Featured Articles
Nirvik Singh, Global COO and President International of Grey Group, cultivating culture and utilising AI to enhance rather than replace human creativity
On a mission to accelerate the adoption of sustainable energy solutions, US$30 billion Chinese tech firm Longi is not just selling solar – but using it
Armed with an ambitious billion-dollar strategy, Samsung is on track to achieve net zero carbon emissions company-wide by 2050 – but challenges persist