Virgin Blue - changes ahead

[Globetrotter]

Anyone heard that SQ is/has buying majority shares of Virgin Blue and Virgin Blue plan on renaming its domestic and pacific operations to V Australia?

 

[samh004]

Well that’d be news, but haven’t heard a thing about it.

 

[straitman]

Anyone heard that SQ is/has buying majority shares of Virgin Blue and Virgin Blue plan on renaming its domestic and pacific operations to V Australia?

Globetrotter,

I have heard nothing and I forgot to buy today's Australian which is where it would be reported.

 

[albatross710]

If SIA is publicly listed in Singapore I assume they would need to have made an announcement to the exchange, as would VB to the ASX.

Too much to do today to look for any statements but it would be good news for all of the SQ KF as we'd hopefully have a new outlet for flight redemptions in Oz.

 

[Mal]

Too much to do today to look for any statements but it would be good news for all of the SQ KF as we'd hopefully have a new outlet for flight redemptions in Oz.

Neither were announced to the ASX, and a quick look at SQ's announcements doesn't show anything either.

It's a good rumour, but I'll wait till some fact comes out!

 

[medhead]

Well if true, then that'd also mark the end of Tiger I guess; can't see SQ backing 2 Australian airlines.

 

[NM]

Well something has caused the VBA share price to spike to 64c on Wednesday (62c today), up from 55c last week. At the same time, QAN has gone from $2.92 down to $2.73.

 

[Must...Fly!]

Well if true, then that'd also mark the end of Tiger I guess; can't see SQ backing 2 Australian airlines.

I, for one, welcome Virgin Blue's new SQ overlords.

But hang on a second...no Airways?! :shock::shock:

 

[medhead]

Well something has caused the VBA share price to spike to 64c on Wednesday (62c today), up from 55c last week. At the same time, QAN has gone from $2.92 down to $2.73.

Probably just profit season machinations. VBA has improved or their forecast has improved or something.

I wouldn't read anything into relative share price movements between QAN and VBA. The companies are substanially different, with the only similaity being they are in the same industry.

 

[dajop]

Well if true, then that'd also mark the end of Tiger I guess; can't see SQ backing 2 Australian airlines.

Why not? Qantas Ltd backs 2 Australian airlines operating in a coordinated manner in different market segments.

 

[medhead]

Why not? Qantas Ltd backs 2 Australian airlines operating in a coordinated manner in different market segments.

Ummm. Interesting.
Presently, DJ seems to be tackling the combined QF/JQ. Offering cut price but also corporate kind of premium service. TT is basically up against JQ and trying to take the real price sensitive bottom
So they would reposition DJ as truely into the QF market space and leave TT against JQ and perhaps move TT more to the leisure market.

Or something like that. Ok seems possible. Still small chance but I'm convinced.

 

[oz_mark]

I have heard there is certainly a desire for a common brand name, but have not heard this in the SIA context.

 

[Jeffrey O'Neill]

I would think SIA couldn't have a majority ownership unless RB sold out, and even then they could only own up to 49%, unless there's a similar foreign ownership cap like with QF.

Also with VAustralia teaming up with Delta I find it hard to believe they would be getting into bed with an alternative group.

 

[Standby]

Happy to be corrected but dosent VA have to remain "Australian owned" to access ex Aust Int rights.
I tend to think the recent profit upgrade and the fact the DL/VA joint venture is progressing soothly would be driving up the share price

 

[markis10]

I would think SIA couldn't have a majority ownership unless RB sold out, and even then they could only own up to 49%, unless there's a similar foreign ownership cap like with QF.

Also with VAustralia teaming up with Delta I find it hard to believe they would be getting into bed with an alternative group.

RB may want to get back more of VS, so selling some DJ shares to SQ may make sense in that respect.

 

[SeaWolf]

I would think SIA couldn't have a majority ownership unless RB sold out, and even then they could only own up to 49%, unless there's a similar foreign ownership cap like with QF.

Only QF has the foreign ownership cap. If the other holders are willing to sell then SIA could (theoretically) buy 100% of DJ. Of course there would be other hurdles they'd have to clear for such a deal but a foreign ownership cap isn't one of them.

 

[ozbeachbabe]

SQ have been dying to get their hands on a share of the lucrative trans-Pacific market so any option that would get them closer to the holy grail would be snapped up if it was there for the taking.

 

[SeaWolf]

SQ have been dying to get their hands on a share of the lucrative trans-Pacific market so any option that would get them closer to the holy grail would be snapped up if it was there for the taking.

That was very true back when the trans-Pacific market was lucrative, back in the days of QF holding ~80% and UA the other ~20%, but those days are long gone and the competition on that route has been pretty cut throat since that start of VA and then DL on the route. I think SQ has well and truely lost interest.

 

[moa999]

plus the fact that the Qantas results whilst average overall were good domestically and bad internationally.

Number of brokers thus saying sell Qantas, buy Virgin as Virgin more leveraged to domestic.

 

[NM]

Happy to be corrected but dosent VA have to remain "Australian owned" to access ex Aust Int rights.
I tend to think the recent profit upgrade and the fact the DL/VA joint venture is progressing soothly would be driving up the share price

It must be an Australian company. does not really matter where the share holders come from. But must be registered as an Australia company, pay Australian taxes, abide by Australian laws (including taxation and industrial relations etc), and hold Australian AOC etc.

Several of those requirements involve costs that are higher than many foreign airlines experience in their home countries, reducing the cost advantage from which they would benefit if able to operate as a foreign company.