Singapore Airlines (SIA) will purchase a 10% stake in Virgin Australia.
The stake, which is worth AU$105.3 million (US$110m) will be acquired through a placement of new shares by Virgin Australia. Singapore Airlines will purchase 245.57m shares at 42.88 Australian cents per share.
“This major development demonstrates the importance and strength of the partnership between our two airlines, and our shared commitment to an alliance that provides a wide range of consumer benefits,” said SIA’s CEO Goh Choon Phong.
“Singapore Airlines fully supports the ongoing transformation at Virgin Australia, which has already resulted in a more competitive aviation market in Australia. With this investment, there is no doubt that Singapore Airlines and Virgin Australia intend to remain alliance partners for the long-haul,” he added.
SIA and Virgin Australia entered into an operational alliance last year, encompassing codesharing, coordinated schedules and joint sales, marketing and distribution. The airlines said they expect to expand their codeshare routes in future.
The Australian Foreign Investment Review Board (FIRB) has already approved the share purchase, which is expected to be completed on 16 November 2012.