Deal looms on Air NZ’s Virgin stake

Sir Richard Branson says the sale of Air New Zealand’s $450 million stake in Virgin Australia will be concluded soon.

Sir Richard Branson expects a deal within two to three weeks

Billionaire Sir Richard Branson says the sale of Air New Zealand’s $450 million stake in Virgin Australia will be concluded within the short term but the entrepreneur would not be drawn on who would buy it.

The Virgin Group founder told The Australian an outcome was expected within two to three weeks but he would not be drawn on whether he would buy the shares himself.

Sir Richard was in Australia over the weekend for a range of meetings including the launch of a koala conservation program on Makepeace Island on Noosa River, which he jointly owns with Brett Godfrey, a former chief executive of Virgin Australia.

Air New Zealand announced in March that it intended to sell its shares in Virgin Australia, and Singapore Airlines and another airline are in the race to buy it.

“Air New Zealand have been saying for some time they need a return from their investment in Virgin Australia and it’s going the other way,” said one senior airline source yesterday. “Air New Zealand is a government-owned public company (so) they can’t have $450 million locked up. Air New Zealand is also struggling because Qantas has moved into their domestic regional market and they have Qantas and American Airlines coming into New Zealand. Air New Zealand need to be commercial. “It has not made a return (from its investment in Virgin Australia) and is not likely to make a return,” said the source speaking on condition of anonymity.