Air New Zealand increases stake in Virgin Australia

WELLINGTON Thu Oct 3, 2013 4:40pm EDT

Virgin planes are parked next to each other at Kingsford Smith airport in Sydney August 30, 2013. REUTERS/Daniel Munoz

Virgin planes are parked next to each other at Kingsford Smith airport in Sydney August 30, 2013.

Credit: Reuters/Daniel Munoz

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WELLINGTON (Reuters) - Air New Zealand (AIR.NZ) on Friday said it would increase its stake in Virgin Australia Holdings Ltd to 25.9 percent to increase its competitiveness in the region.

In a statement, the company said it had received approval from Australia's Treasury to boost its holdings in the Australian airline after it raised its stake to around 23 percent in June.

"The opportunity to take our shareholding in Virgin to 25.9 percent and the recently extended Tasman Alliance with Virgin mean we can confidently work with Virgin to provide a strongly competitive, Australasian and international airline network," Air New Zealand Chief Executive Officer Christopher Luxon said.

Virgin Australia's other major shareholders are Virgin Group and Singapore Airlines (SIAL.SI).

Air New Zealand is around 74 percent owned by the New Zealand government. Wellington is planning to sell a minority stake in the company in the coming years.

(Reporting by Naomi Tajitsu; Editing by Kevin Liffey)

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