SYDNEY: Virgin Australia sold 10 percent of its business to Singapore Airlines while agreeing to buy a 60 percent stake in Tiger Airways Australia as it upped the ante in its battle with Qantas.
In a slew of announcements, the country’s second-biggest airline after the Flying Kangaroo also said it was making a Aus$98.7 million ($ 101.9 million) takeover offer for Perth-based Australian regional carrier Skywest.
Virgin agreed to pay Aus$ 35 million ($ 36 million) for its holding in Tiger, the loss-making subsidiary of Singapore’s Tiger Airways, while Singapore Airlines bought its stake for Aus$ 105 million.
“The transactions overall represent a monumental shift for Virgin Australia which, if approved, will see a more even playing field in Australian aviation,” Macquarie analysts said in a note.
“They arguably create a replica of Qantas.”
Virgin chief executive John Borghetti said the deals were designed to accelerate the airline’s growth and increase competition in Australia, where the domestic market has long been dominated by Qantas.
The acquisitions of Tiger and Skywest would boost Virgin’s presence in the budget and regional markets, “enabling us to fast-track our expansion in these areas and become a stronger competitor.”
“These transactions will bring important benefits to Australia, driving growth in jobs, tourism and competition,” said Borghetti, adding that he planned to make the carrier Australia’s “airline of choice in all markets.”
If the Tiger and Skywest deals receive regulatory and shareholder approvals, Virgin will expand its fleet to 139 aircraft and employ more than 9,000 workers.
Australia has a lucrative domestic market and global airlines have been deepening ties with local carriers to access it.
Last month, Qantas and Emirates announced a major global alliance which opens up Qantas’s domestic network of more than 50 destinations and nearly 5,000 flights per week to the Dubai-based airline.
Singapore Airlines is a key international competitor to Qantas and CEO Goh Choon Phong said his company taking a stake in Virgin showed “our shared commitment to an alliance that provides a wide range of consumer benefits.”
“Singapore Airlines fully supports the ongoing transformation of Virgin Australia, which has already resulted in a more competitive aviation market in Australia,” he added.
The Singaporean airline, which paid 42.88 cents a share for an issue of 245.6 million stock, a 6.8 percent discount to the last trading price, joins Etihad which also has a 10 percent stake in Virgin.
Richard Branson’s Virgin Group and Air New Zealand are other major equity holders, giving the airline significant financial clout to mix it with Qantas.
Virgin shares closed up 5.4 percent Tuesday at 48.5 Australian cents.
Borghetti described Singapore Airlines as “an important strategic alliance partner” and City Index analyst Peter Esho said Singapore’s move was “a strategic shift down south to back Qantas’ main domestic competitor.”
“As Qantas closes more Asian deals and looks at ramping up its Emirates code share alliance, competitors will be feeling the heat,” he said.
In the Skywest deal, Virgin made a cash and scrip offer for the airline that operates in regional Australia and Southeast Asia, in competition with Qantas’ regional service QantasLink.
Skywest executive chairman Jeff Chatfield said the offer represented a substantial premium to the current share price.
“Based on our advice it is likely that this proposal will take some months to fully play out,” he said in a statement.
Virgin Australia sells stake to Singapore Airlines
Virgin Australia sells stake to Singapore Airlines
Saudi Arabia’s cultural sector is a new economic engine between Riyadh and Paris, says ambassador
RIYADH: Culture has become a fundamental pillar in bilateral relations between France and Saudi Arabia, according to the French Ambassador to the Kingdom, Patrick Maisonnave.
Maisonnave noted its connection to the entertainment and tourism sectors, which makes it a new engine for economic cooperation between Riyadh and Paris.
He told Al-Eqtisadiah during the opening ceremony of La Fabrique in the Jax district of Diriyah that cultural cooperation with Saudi Arabia is an important element for its attractiveness in the coming decades.
La Fabrique is a space dedicated to artistic creativity and cultural exchange, launched as part of a partnership between the Riyadh Art program and the French Institute in Riyadh.
Running from Jan. 22 until Feb 14, the initiative will provide an open workspace that allows artists to develop and work on their ideas within a collaborative framework.
Launching La Fabrique as a space dedicated to artistic creativity
The ambassador highlighted that the transformation journey in the Kingdom under Vision 2030 has contributed to the emergence of a new generation of young artists and creators, alongside a growing desire in Saudi society to connect with culture and to embrace what is happening globally.
He affirmed that the relationship between the two countries is “profound, even cultural par excellence,” with interest from the Saudi side in French culture, matched by increasing interest from the French public and cultural institutions unfolding in the Kingdom.
Latest estimates indicate that the culture-based economy represents about 2.3 percent of France’s gross domestic product, equivalent to more than 90 billion euros ($106.4 billion) in annual revenues, according to government data. The sector directly employs more than 600,000 people, making it one of the largest job-creating sectors in the fields of creativity, publishing, cinema, and visual arts.
Saudi Arabia benefiting from French experience in the cultural field
Maisonnave explained that France possesses established cultural institutions, while Saudi Arabia is building a strong cultural sector, which opens the door for cooperation opportunities.
This comes as an extension of the signing of 10 major cultural agreements a year ago between French and Saudi institutions, aiming to enhance cooperation and transfer French expertise and knowledge to contribute to the development of the cultural system in the Kingdom.
He added that experiences like La Fabrique provide an opportunity to meet the new generation of Saudi creators, who have expressed interest in connecting with French institutions and artists in Paris and France.
La Fabrique encompasses a space for multiple contemporary artistic practices, including performance arts, digital and interactive arts, photography, music, and cinema, while providing the public with an opportunity to witness the stages of producing artistic works and interact with the creative process.
