Air New Zealand Increases Stake in Virgin Australia to 25.99%

   By Lucy Craymer 
 

WELLINGTON--Air New Zealand Ltd. (AIR.NZ) has increased its shareholding in Virgin Australia (VAH.AU) to the maximum allowed by the Foreign Investment Board.

A security notice released to the New Zealand stock exchange Tuesday showed that Air New Zealand had increased its stake in the company to 25.99% from 24.46%. The company had won approval from Australia's Foreign Investment Review Board to increase its holding to this level in October 2013.

Virgin Australia is currently battling to win market share from Australian flag carrier Qantas Airways Ltd. (QAN.AU) while facing high jet fuel costs and fragile consumer confidence. The company recorded a first-half loss in the six months through December.

Virgin Australia, a former discount carrier, has put business-class seats on flights and added service to small towns in the western part of Australia, where people fly to work at remote mines. Qantas has responded by adding capacity, leading to a glut of seats and forcing both airlines to discount prices.

Singapore Airlines Ltd. (C6L.AU), Etihad Airways and Richard Branson's Virgin Group also hold stakes in the Australian based airline.

Write to Lucy Craymer at [e-mail], @lucy_craymer

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