Virgin Australia makes bid to takeover Skywest; buy majority of Tiger Airways Australia; and sells 10% of Virgin Australia to Singapore Airlines
David Eyre 30 October 2012 © David Eyre
- Singapore Airlines purchases 10% of Virgin Australia for $105 million
- Virgin Australia makes takeover offer for Skywest Airlines for $98.7 million
- Virgin Australia takes majority stake (60%) of Tiger Airways Australia for $35 million.
Virgin offers $98.7million to takeover Skywest
Photo © David Eyre
Virgin has made a $98.7 million takeover offer for WA-based regional and FIFO airline Skywest Airlines.
This move will enable Virgin to directly compete with Qantas-owned subsidiaries QantasLink and Network Aviation in the FIFO and regional WA markets, in addition to services it already operates in its own right within regional WA.
Skywest would be re-branded Virgin Australia but will continue to operate under its air operator’s certificate with its own CEO and management team, based in Western Australia. Virgin Australia CEO said that Virgin will invest to support the growth of Skywest.
Skywest is currently owned by Singapore-based investment company CaptiveVision Capital Ltd and Virgin Australia Holdings (10% purchased on 10 April 2012).
Virgin and Skywest already had close links through code sharing and frequent flyer arrangements, and in 2011 Virgin Australia commenced a 10-year alliance with Skywest Airlines to operate ATR72 turboprops in Virgin Australia colours.
The Skywest takeover is subject to approvals from the Australian Competition and Consumer Commission, the Australian Foreign Investment Review Board, Singapore’s High Court, and the Securities Industry Council of Singapore. Skywest shareholders will also need to vote on the takeover offer, and it is expected that the acquisition will be completed by mid-2013.
Singapore Airlines acquires 10% of Virgin Australia
Singapore Airlines has purchased a 10% share of Virgin Australia, as a “strategic investment” which will help fund Virgin’s continued growth. The two airlines have had codeshare and frequent flyer arrangements in place since 2011.
Photo © David Eyre
The sale of $105 million worth of Virgin Australia shares will be used to fund Virgin’s continued growth and has received approval under the Australian Government’s Foreign Investment Policy.
Virgin’s other major shareholders are Richard Branson’s Virgin Group (26%), Air New Zealand (20%) and Etihad Airways (10%).
Virgin takes majority stake in Tiger Airways Australia; Tiger to expand fleet
Photo © David Eyre
Virgin’s acquisition of a 60% majority shareholding in Tiger Airways Australia (the remaining 40% to be owned by Tiger Airways Holdings Ltd, Singapore) will provide Virgin with better access to the budget market, and enable Virgin to compete directly with Qantas Group’s budget airline Jetstar.
The acquisition will be completed by mid-2013.
This will further cement Virgin’s relationship with Singapore Airlines, as Tiger Airways Holdings is 33% owned by Singapore Airlines.
Tiger Airways Australia will retain its separate brand and expand its fleet in Australia from 11 aircraft to 35 aircraft by 2018.
