Singapore Airlines Closely Monitors Situation at Virgin Australia
13th May 2016
With Air New Zealand's imminent departure as a shareholder from Virgin Australia, the second largest Australian carrier behind Qantas is in trouble to find a suitable replacement. It may not have to look very far as another mayor shareholder, Singapore Airlines, is widely rumored to slip into Air NZ's place.
Even though it's all speculation and rumors at this point, Singapore Airlines Chief Executive Officer Gog Choon Phong may have shed some light on the potential interest his company has in having a bigger stake in Virgin Australia.
Speaking at a press conference held in Singapore this Friday, Singapore Airline CEO said:
"We are watching closely what is going on. The Australian market is very important."
With the third mayor shareholder Etihad seemingly quiet on the matter and none of the carriers from the "outside" expressing interest in buying shares in Virgin Australia, this is as close to someone being willing to purchase those shares.
On Monday, one of the airlines speculated to buy Air NZ's stake, Qatar Airways, denounced those rumors. The CEO of this airline, Akbar Al Baker said at the time:
"No. We only buy into successful carriers. You know their results."
Of course, no one can really blame Singapore Air or anyone else for not rushing headlong into buying more shares of Virgin Australia, especially since this has the potential to hurt its fast growing Indian and Chinese markets.
Still, Singapore Air CEO hinted at the press conference at the importance of Virgin Australia to his airline, saying it allows Singapore Airline to reach remote parts of Australia more easily than the Singaporean carrier could do on its own.
"We are happy with our stake currently. So we don't see that being diluted, as in our interest in Virgin Australia. Let me put it very clearly, I don't mean interest like in stake, but our interest in commercial operation."
If anything, Goh's positive comments have helped Virgin Australia climb on the stock market as its shares went up 3.6 per cent and close trading at 27.5 Aus. Cents for a market value of AUS$970 million.