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Delta / Virgin Blue

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Well-known member
Apr 22, 2008
Here is some interesting news. Apparently shares of Virgin Blue have been halted on the stock exchange in Australia pending some announcement tomorrow.

Comments or any educated guess?...

Link to article:


Airline Virgin Blue halts shares amid capital talk

SYDNEY, July 13 (Reuters) - Australian airline Virgin Blue Holdings (VBA.AX) called a halt to trade in its shares on Monday, pending an announcement. It gave no more details.

The Sydney Morning Herald said in an unsourced report on Monday that Virgin was poised to raise up to A$400 million ($312 million) to bolster its balance sheet and cement its recently struck partnership with Delta Air Lines (DAL.N). [ID:nSYU006818] (Reporting by Mark Bendeich) ($1=1.284 Australian Dollar
"Virgin defers on call for funds

Matt O'Sullivan

July 14, 2009
VIRGIN BLUE has left open the door to a capital-raising after taking several hours yesterday to issue a carefully worded statement denying speculation of an imminent announcement.
The airline entered a trading halt early yesterday after the Herald reported that it was on the verge of announcing a raising of up to $400 million, only to emerge more than four hours later denying a potential rights issue was under way.
But Virgin's statement implied that it has been actively canvassing fund managers' appetite for an issue of new shares. "Given the prevailing macro-economic conditions, Virgin Blue … assesses capital management initiatives as appropriate. However, the board has not approved any such transaction as has been reported," it said in a statement to the ASX.
It did not respond to questions from the Herald about why it had to request a trading halt in order to respond to a media report, and whether Virgin management had made any proposal to the board.
Speculation about Virgin tapping the market for cash to steer its way through a severe downturn in travel has been brewing for weeks.
Australian fund managers say they would be tempted to buy into Virgin only if it was able to secure a cornerstone investor to give them comfort about its longer-term future.
Private equity investors of the likes of TPG and Indigo Partners - an investor in Tiger Airways - are the only likely candidates given the strained financial positions of most airlines.
Virgin will also be mindful of not breaching a 49 per cent cap on foreign ownership. If the airline becomes majority foreign-owned, it will be unable to fly on its recently launched route between Australia and the US.
British entrepreneur Richard Branson, who has a 25.5 per cent stake in Virgin, would also have to invest more capital to avoid a dilution of his holding.
Despite Delta Air Lines and Virgin unveiling joint-venture plans for services between Australia and the US, analysts doubt the US carrier's willingness and ability to invest equity.
The Singaporean backers of Regional Express also have a 4 per cent stake in Virgin, but industry insiders are sceptical of their ability to raise the capital needed even if they wanted to increase their holdings.
Likewise, Air New Zealand has been raised as a possible cornerstone investor given that a tie-up could result in substantial cost savings, but it would hinge on the NZ Government's appetite.
Insiders also downplayed interest from Middle Eastern airlines despite Emirates forming a code share with the Australian carrier last month.
Shares in Virgin closed down 1.5c at 29c yesterday.

Source: The Sydney Morning Herald"
It is going to be an interesting week down here in VA ave. The TV trucks are already setting up ;)
It is going to be an interesting week down here in VA ave. The TV trucks are already setting up ;)

So First the DAL / VB JV is disapproved because it's "not beneficial" enough for the consumer, but this:

The U.S. Department of Transportation said Wednesday it plans to grant antitrust immunity for two proposed airline alliances between U.S. and Japanese carriers so they could more closely coordinate their international operations, MarketWatch reported.
The tentative decision would give immunity to a proposed alliance between American Airlines and Japan Airlines, and to an alliance between Continental, United and All Nippon Airways.
The DOT said that granting the immunity would provide lower fares, increased services, better schedules, and reduced travel and connection times, and helps to enhance competition in transpacific markets.
The agency said it would take public comment on the issue for 21 days before granting a final decision.

Yeah, I expect this to lower prices and increase capacity between the US and Japan.

I think the DOT is talking from both sides of it's mouth......
Threads older than a year need to be locked or something.

I was originally looking for the thread a couple months ago where DAL / VB were denied immunity due to "lack of benefits" to the consumer according to the DOT, yet all the major JV's are approved where there will clearly be increased pricing, less options, etc. I guess that is beneficial to the consumer, they just don't know that the feds know better what's good for them.

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