Air New Zealand plans to raise its stake in Virgin Australia Holdings (VAH) to 25.9% after getting the green light from Australian authorities.
In a statement to the Australian Securities Exchange, Air NZ said it had received approval from the Australian Treasurer to lift its stake after gaining consent from the Foreign Investment Review Board (FIRB) and the Australian Competition and Consumer Commission (ACCC).
New Zealand's national carrier plans to acquire an additional three per cent of shares in Virgin Australia under an existing forward contract, taking its holding to 22.9%, and acquire a further 3% of the stock under creep provisions in Australian regulations, the airline said.
"We are fully supportive of the Virgin management team and strategy which provide an ideal complement to our own network and, importantly, an opportunity to participate in the Australian market with a respected partner," Air New Zealand chief executive Christopher Luxon said.
Air New Zealand formed a partnership with Virgin, providing links with its flights into Australia, after the failure of its Australian-based airline Ansett in 2001. Virgin Australia's other major shareholders are Virgin Group and Singapore Airlines.
Shares in Air New Zealand last traded at $NZ1.495, having gained 15% this year. The stock is rated a 'buy', according to the Reuters consensus of six analysts. Some 74% of the stock is owned by the government which plans to sell some of the shares as part of its policy to sell minority stakes in state assets.