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Posted: 2022-09-16 07:33:35

Air New Zealand has ruled out a multi-billion dollar merger deal with Virgin Australia, amid mounting speculation that private equity giant Bain Capital could bring the number two carrier and Qantas’ rival back to the ASX boards as soon as next year.

New Zealand’s flag carrier, which owned a 19.99 per cent stake in Virgin between 2011 and 2016, issued a statement to the ASX and NZX on Friday, stating that it was not in any discussions with any airlines about mergers.

“Air New Zealand confirms that it has not been approached, and is not in discussion with any parties, regarding a potential merger transaction,” the airline’s chair, Dame Therese Walsh, said in the statement. “Air New Zealand remains in compliance with its NZX continous disclosure obligations.”

Air New Zealand and Regional Express have rejected media speculation Virgin Australia is considering a merger aquisition.

Air New Zealand and Regional Express have rejected media speculation Virgin Australia is considering a merger aquisition.Credit:James Alcock

Virgin collapsed in 2020 when flights were grounded at the start of the COVID-19 pandemic. Bain beat out a host of private equity funds to buy the airline out of voluntary administration for $3.5 billion in November 2020. Media and market speculation is mounting that Bain could look to list Virgin on the ASX as soon as 2023, in what would be a highly anticipated sharemarket float.

Financial statements lodged with the corporate regulator this week show that Virgin’s operational loss ballooned to $386.7 million last financial year, compared with $76.8 million in 2021.

But the airline’s chief executive, Jane Hrdlicka, has said the loss reflected the carrier’s “transition out of a really tough period for the industry into a period that looks pretty bright” and is forecasting a return to profitability this financial year.

“We’re very focused on running the business and making sure we’re in great form for an eventual [sharemarket] listing,” she said this week.

“We know we’ve got to continue to take costs out [of the business] because inflation is coming at us faster than we can bail the water out,” she continued.

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