Air New Zealand’s unhappiness with Virgin Australia has caused today’s ASX trading halt in VAH while the highly profitable NZ carrier decides whether to sell all or part of its minority 25.9 percent stake in Australia’s second largest airline group.
The reactions of the other minority airline stake holders, Singapore Airlines and Etihad, have not been made public as yet. However there were according to street chatter in NZ, at least three things that would have been influential in the Kiwi carrier’s decision, or rather, studied indecision.
In no particular order Virgin Australia was held to have botched some USD debt raisings, it has a fuel hedging policy that was manifestly inferior to that of Qantas and deprived it of some of the benefits of lower oil costs, and it had somehow managed to have a very poorly performing regional turboprop fleet, despite the fact that the ATRs involved make very good money for almost anyone who operates them.
That latter point was put to Virgin Australia yesterday morning, as indications of disquiet across the Tasman began to be heard.
There was also a clash of cultures when it came to passenger amenity in product offerings, with the Australian carrier investing heavily in one of the best, but possibly too exclusive, domestic and (soon) international business class offerings in the world.
Well, certainly up there with those of minority stakeholders Singapore Airlines and Etihad.
A great deal could happen between now and the resumption of trading in VAH shares on the ASX on 1 April this Friday unless there is a prior announcement.
This is the Air NZ statement that preceded the ASX ordering of a trading halt.