Virgin Blue sells 50% share to drive expansion
Australia’s second largest airline Virgin Blue has strengthened its position against market leader Qantas by selling off a 50% stake to cargo operator Patrick Corporation for Aus$260m.
The funds will give Sir Richard Branson’s low cost carrier money for expansion as it seeks to exploit the opportunities left by the recent collapse of Ansett. Virgin Blue said in a statement that “depending on capital requirements which were yet to be determined, part of the payment may go towards new capital for Virgin, and the balance as consideration for existing shares.” A further consideration may be payable depending upon the performance of the company over the next three years.
Virgin Blue added that the agreement will allow the company “by being a truly Australian owned airline” to operate international routes in the future “if it wished to do so”.
Sir Richard Branson (left), who will remain chairman of Virgin Blue, said: “Patrick Corporation is the ideal partner for Virgin Blue in Australia. I have a great deal of respect for both [Patrick corporation md] Chris Corrigan and the company which has been one of the most innovative in the Asia Pacific region.
“They clearly bring a very strong transport and logistics expertise into the business, and a business reputation that is second to none. I am greatly looking forward to working with both Patrick Corporation and the team at Virgin Blue to build an even stronger airline that Australia can continue to be proud of.”
Mr Corrigan added: “Virgin Blue has changed the face of Australian aviation by bringing friendly, efficient and low cost service to the Australian public. It has great staff and a very strong management team. Having watched it grow from 2 planes to 16 in only 20 months, I have every confidence in the exciting plans to continue the expansion of the business.”
Virgin Blue currently operates 16 aircraft with a further 7 scheduled for delivery by the end of the year.
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