Air New Zealand is reviewing its shareholding in Virgin Australia, including a possible sale.

Air New Zealand is reviewing its shareholding in Virgin Australia, including a possible sale.

From the Financial Times:

The Kiwi flag carrier said on Wednesday it is “exploring options” for its shareholding and had asked financial group First NZ Capital and Credit Suisse to advise it on its options. Christopher Luxon, chief executive at Air New Zealand, is resigning from Virgin’s board immediately given the development.

Air New Zealand chairman Tony Carter was quoted in the group’s statement today as saying it does not want a large minority equity position in Virgin Australia “as it focuses on its own growth opportunities.”

Thoughts anyone? Will this instigate SQ to sell and drive Virgin further into Etihad's arms?

seem VA is the baby that no body wants because they are becoming too expensive to 'raise' lol

If you take off the flying hat and out on a business only hat Virgin is a terrible business. It is poorly represented in the regional domestic market which is key for base line revenue and multiply up to connecting services. All successful national businesses have strong regional presence, successful Telcos, Banks, supermarkets, department stores all have strong regional presence. Townsville is a great example, despite is being the first destination Virgin flew in Qld outside of Brisbane 20 years ago it still sits at just 26% market share, Darwin is the same, it's fundamentals are poor, Air NZ are smart to get out. 

For what's it worth, I think Virgin should join Star Alliance and serve as the Star Alliance Australian hinterland partner for the numerous Star Alliance carriers in the region. Its natural strength is the AU domestic market, by way of legislative accident. Best to use it with one dedicated partner (Star Alliance) to sink roots and grow.

The current strategy is haphazard and too clever by half. Virgin does not have sufficient clout to string along Delta, Etihad and SQ/NZ. It just ends up being a dispensible bitch to all concerned.

I did wonder about this after reading the report last week on AusBT about the market share of Lufthansa & Swiss into the Australian market. Surely joining Star Alliance would be a good move. Would also give options for Star members flying to Japan with ANA.

But Virgin is currently effectively the default partner for both Star Alliance and Sky Team carriers.

Even after NZ sells it still has ownership stakes via SQ (Star), EY and a transpac alliance with Delta (SkyTeam)

This why Virgin will never be able to replace Qantas as Australia's top airline.