* Virgin says three deals will boost its domestic
* Singapore Airlines seen gaining exposure with 10 pct
* Virgin to acquire 60 pct of Tiger Australia, 100 pct of
(Adds analyst comment, details)
MELBOURNE, Oct 30 Virgin Australia Holdings Ltd
said alliance partner Singapore Airlines will
buy a 10 percent stake for A$105 million ($108 million), helping
it compete with Qantas Airways in the lucrative
Seeking to consolidate its domestic position, Virgin also
agreed to provide a lifeline for Singapore's struggling
Australian budget unit, by agreeing to acquire 60 percent of
Tiger Australia for A$35 million.
Singapore will join unlisted Etihad Airways, Abu Dhabi's
flag carrier, in taking a minority equity stake in Virgin.
The series of announcements on Tuesday by Virgin to help
shore up its position follows Qantas' proposed alliance with
Dubai's Emirates, announced last month.
"Qantas' ambition to become a premium player in the Asia
Pacific aviation market is meeting some stiff resistance, most
notably from other key players in the region like Singapore
Airlines," said City Index analyst Peter Esho.
"We see today's move by Singapore Airlines as a strategic
shift down south to back Qantas' main domestic competitor," he
Under the agreement, a placement of 245.6 million shares
will be made to Singapore Airlines at an issue price of A$0.4288
Virgin and Tiger will also jointly invest a further A$62.5
million to increase Tiger's fleet size.
Virgin also said it would acquire 100 percent of regional
airline Skywest, which services fly-in fly-out mining camps, for
A$0.45 per share.
"The transactions announced today are in line with Virgin
Australia's strategy to become the airline of choice in all
markets, in order to diversify our earnings and drive growth
opportunities for the business," said Virgin Australia Chief
Executive Officer John Borghetti.
(Reporting by Victoria Thieberger; Editing by John Mair)