IAG Buys Vueling, Etihad Invests To Jet & Singapore Airlines Ups Its Share Of Virgin Australia

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It has been quite a 24 hours in the airline acquisition market; IAG ups its share of Vueling to 91% (read more here), Etihad buys 24% share of Jet Airways of India (read more here), and Singapore Airlines doubles its stake on Virgin Australia to 19.9% (read more here).

wsj-airlines

IAG’s Purchase Of Vueling

IAG, the parent of British Airways and Iberia, already had a close to 46% share of the Spanish low cost carrier Vueling before most of the investors accepted its offer to buy rest of the stock. IAG now controls close to 91% of the airline.

bloomberg-iag-vueling

It is interesting to see, if Vueling will be swallowed by IAG’s Iberia unit or whether it will stay independent. Anyway, Vueling will provide much needed connecting traffic for Iberia’s long haul flights.

Etihad’s Purchase of 24% Of Jet Airways

Etihad has been on the buying spree lately. It bought part of the German airline Air Berlin in 2011. It also owns 10% of Virgin Australia.

ft-etihad-jet

Now, the airline has bought 24% of Jet Airways for $380 million dollars. Jet Airways will issue new shares and is going to use at least part of the proceedings to pay down its debt.

Singapore Airlines Doubling Its Stake On Virgin Australia

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Singapore Airlines doubled its stake of Virgin Australia to 19.9% by buying shares of the airline from Virgin Group. If the airline had purchased 20% or more, it would have needed to make an offer for rest of the company as well.

Conclusion

Seems that the airlines have strategic problems are trying to buy into partnerships by buying majority or minority shares of other airlines. Only the time will tell if this is the right approach.

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