An announcement by Virgin Australia that it was selling a 13% stake to China's HNA Group was followed by an announcement from Air New Zealand that it is selling a 19.98% stake in Virgin Australia to China's Nanshan Group.
Research firm the Centre for Aviation (CAPA) believes Singapore Airlines has missed out by giving up the chance to take control of Virgin Australia.
An announcement by Virgin Australia that it was selling a 13% stake to China's HNA Group was followed by an announcement from Air New Zealand that it is selling a 19.98% stake in Virgin Australia to China's Nanshan Group.
HNA is shortly expected to top up its stake in Virgin Australia to 19.99%. HNA and Virgin Australia plan to start direct flights to and from China next year.
CAPA said SIA was understood to be moving towards securing a 51% holding in Virgin Australia when it was blindsided by the HNA deal. “That no longer seems a realistic option and perhaps puts an end to SIA’s longstanding aspirations to own a dominant minority of the Australian market,” CAPA said.
CAPA added, “SIA has not been particularly successful in its international partnership dealings; its one bold move proved a disaster – buying a 49% share in Virgin Atlantic at well above the odds, then suffering for years before being able to unload the holding to Delta.
“With a sorry track record of equity investments in foreign airlines, it will now be left languishing with the smallest of the four main shareholdings in Virgin Australia.
“This was one purchase Singapore Airlines really needed. Instead, it has mostly just participated in Virgin's losses and is now relegated to an also-ran,“ CAPA added.
SIA earns nearly a fifth of its revenue in Australia.