Air NZ allowed to buy more Virgin Australia
Days after reauthorising Air New Zealand's trans-Tasman partnership with Virgin Australia, the Australian Competition and Consumer Commission has paved the way for the national carrier to lift its stake in Virgin Australia to 25.99 per cent.
Air New Zealand welcomed the ACCC's announcement not to oppose its bid to acquire a further 6 per cent stake of Virgin Australia.
The Australian agency ruled the potential increased share would not materially affect competition in any market.
"It would not provide Air New Zealand with the ability to control or materially influence Virgin or significantly affect Air New Zealand's incentives to compete with Virgin," ACCC Commissioner Jill Walker said.
In its analysis, the ACCC noted the potential acquisition would also not affect the potential to tacitly co-ordinate if and when the trans-Tasman partnership expires in 2018.
However, it also said it was unclear if they would return to competition after 2018.
The agreement remains subject to customary Foreign Investment Review Board (FIRB) conditions in Australia.
The national carrier noted the ACCC move was just one step in a process.
"FIRB sought the views of the ACCC on any competition-related issues. Whilst the ACCC announcement is a positive development, Air New Zealand has not yet received FIRB approval," Air New Zealand said in a statement to the NZX.
Air New Zealand's stake in the Australian carrier has steadily climbed since 2011, and in June it signalled it would look to increase its share by 6 per cent, in 3 percentage point increments.
Virgin Australia's other airline shareholders include Singapore Airlines and Etihad Airways.
Air New Zealand shares rose 1 cent on the news to $1.42 at 3pm.