SIA not contemplating majority stake in Virgin Australia

A Virgin Australia plane taking off at Sydney Airport.
A Virgin Australia plane taking off at Sydney Airport.PHOTO: AFP

SINGAPORE - The Singapore Airlines (SIA) has clarified that it "has not contemplated taking a majority stake in Virgin Australia", following reports that it was moving towards securing a 51 per cent holding in the Australian carrier.

In a statement to the press on Friday (June 24) morning, SIA said: "SIA wishes to put on record that it has not contemplated taking a majority stake in Virgin Australia.

"SIA's interests in the Australian market - as well as in Virgin Australia itself - are best served through an independent Virgin Australia."

Research firm Centre for Aviation (Capa) had said earlier this week that SIA had missed the opportunity to take control of Virgin Australia after it was blindslighted by Virgin's tie-up with Chinese conglomerate HNA Group.

Earlier, Virgin, Australia's second-biggest airline, had said it was selling a 13 per cent stake to HNA, which the group is expected to top up to 19.99 per cent.

"That no longer seems a realistic option and perhaps puts an end to SIA's longstanding aspirations to own a dominant minority of the Australian market," Capa had said.

While rubbishing the claims on Friday, SIA also reiterated that it is committed to taking up its entitlement in Virgin Australia's A$852 million (S$854 million) equity raising.

This could increase SIA's shareholding from 20.09 per cent to a maximum of 25.9 per cent, should other Virgin Australia shareholders not take up their entitlements.

SIA said the two airlines have "an extensive commercial partnership that has gone from strength to strength over the past five years, providing many consumer benefits".

It added: "SIA is confident of the long-term prospects of Virgin Australia and is committed to supporting its long-term growth."