Friday, December 6, 2019
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Virgin Australia stake not for sale, Branson says

Richard Branson’s 12.5 per cent stake in Virgin Australia is not for sale, the British entrepreneur and founder of the Virgin Group, said yesterday at a press conference in Dubai.

Australian media has previously reported that Branson intends to eventually sell down his stake in the airline.

Three foreign carriers, including Etihad Airways, could be possible suitors.

Etihad Airways, Singapore Airlines and Air New Zealand, all majority state-owned, combined hold more than 65 per cent of Virgin Australia. Singapore Airlines and Air New Zealand have recently increased their stakes in the airline and Etihad President and Chief Executive Officer James Hogan has confirmed he will take a seat on the Virgin Australia board.

Branson slammed regulators who he said “in their wisdom have decided to create a number of very big alliances”.

“Good governments would never have allowed this to happen and now, you have less than a handful of big carriers around the world and prices will go up as a result,” Branson said earlier at an invite-only UK entrepreneurship event. “Competition brings better fares and quality than cooperation,” he said.

But Branson told the media that it is a different game for Virgin Australia. He said that Virgin Australia needs alliances to compete with Qantas.

Branson did not hold back on his criticism of Qantas Chief Executive Officer Alan Joyce, who in recent months has slammed the foreign ownership structure of Virgin Australia and has asked the Australian government for assistance.

“He is in deep [trouble],” Branson said of Joyce, “because he drew a line in the sand and said Virgin [Australia] were not going to have more than 35 per cent of the [Australian domestic] market and he’s lost hundreds of millions in order to try and hold that line.”

Qantas is expected to announce an $A300 million half-year loss later this month while Virgin Australia is also in the red, with brokers forecasting a $49 million (Dh179.9 million) first-half loss. Branson said it would be incredulous if the Australian government does “hand over money” to Qantas and not to Virgin Australia.

There have been no clear indications that the Australian government is willing to financially support either airline.

Branson’s comments follow last week’s announcement that the brand’s flagship airline Virgin Atlantic will cease flights to Australia from May.

“I suspect we carried on going too long, which is always a danger in business,” he said at the event.

A weakened Australian dollar and “massive losses” were behind the pull-out.

Virgin Atlantic lost $10 million last year and a similar figure is expected in 2014, he said.

“If the Australian dollar strengthened again, that would make a big difference [but] for the foreseeable future, it’s unlikely Virgin [Atlantic] is going to be doing the last leg to Australia,” he told the media.

Virgin Atlantic will continue flying to Hong Kong but its decision to pull out of Australia leaves British Airways as the last European carrier flying to the country via Asia.