Singapore Airlines is buying 10 percent of Virgin Australia.
That will step up its competition with rival Qantas in the lucrative Australian market.
Singapore, the world’s second-largest carrier in terms of share value, is moving to preserve its dominant position in the Asia-Pacific premium air travel market.
At the same time Virgin said it will buy 60 percent of struggling budget carrier Tiger Australia – which Singapore Airlines owns one third of – and more than triple the size of Tiger’s fleet, from 11 to 35 planes by 2018.
Virgin has also offered to buy a regional and charter carrier Skywest which supplies mining camps, saying the deals will make it a stronger competitor in all segments
Virgin’s efforts to shore up its position follow Qantas’s proposed 10-year alliance with Dubai’s Emirates, revealed last month. Qantas ditched its 17-year alliance with British Airways in favour of an alliance with Emirates, a key step in the carrier’s efforts to shore up its loss-making international business.
Qantas, which has been propped up by earnings from its domestic operations, will operate through Dubai rather than Singapore as part of that deal.
Singapore will join unlisted Etihad Airways, Abu Dhabi’s flag carrier, in taking a minority equity stake in Virgin. Etihad also has a 10 percent stake.
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