Business

Air NZ to raise stake in Virgin

10:02 am on 4 December 2013

Air New Zealand looks set to raise its stake in Virgin Australia to just over 25%.

Australia's Takeovers Panel on Monday ruled Virgin could proceed with a planned $A350 million rise in equity by Air New Zealand, Singapore Airlines and Etihad Airways.

Forsyth Barr private wealth research head Rob Mercer saw Air New Zealand's move as "prudent".

"They bring a benefit in terms of the strengths of each (one's) domestic markets and the strength of their pool of services on the Tasman," Mr Mercer said.

"Therefore, I think it's a good way for Air New Zealand to play the Australian market without actually going fully into it, like they did 13 years ago."

Air NZ was unlikely to raise its shareholding further but it could not be ruled out, he said.

"I'm not expecting to see any significant lift in that holding from where it currently is. That's the sort of level that they've signalled they're comfortable with."