Aviation

Virgin forks out $700m in attempt to fully reclaim Velocity Frequent Flyer

Huntley Mitchell

Huntley Mitchell

Virgin Australia Group is all set to buy back Affinity Partners’ minority stake in Velocity Frequent Flyer, following months of speculation.

In a statement to shareholders issued this morning, Virgin said it had entered into a term sheet with Affinity to buy back its 35 per cent investment of the frequent flyer program for $700 million.

According to Virgin, the transaction is expected to be completed before the end of year, and is subject to certain conditions, including the finalisation and execution of long-form documentation, funding and approval from the Foreign Investment Review Board.

The move comes after months of speculation around Affinity’s stake in Velocity, with Virgin finally confirming in July that its co-investor wanted out after purchasing its stake for $335 million in 2014.

It’s also a sign of just how valuable the frequent flyer program is to Virgin, having delivered earnings growth of 13 per cent to $132.4 million in an otherwise dour FY19 for the group, which led to the announcement of 750 job cuts.

The buyout deal with Affinity values the business at $2 billion, according to multiple media reports.

Velocity Frequent Flyer recently announced a partnership with rideshare player Ola to combat Qantas’ tie-up with Uber, but also lost BP to Qantas.

When asked what the group plans to do with Velocity if it takes full control, a Virgin Australia spokesperson told Travel Weekly: “It’s important to note that this transaction is not yet finalised, and it continues to be business as usual for the group and Velocity.

“We are currently negotiating the terms of the buy-back and will provide a further update when available.”

SEE WHAT PEOPLE ARE SAYING

Leave a Reply

Aviation

Strong winds force flight cancellations at Sydney Airport

by Huntley Mitchell

The wild weather has also seen Sydney blanketed with pollen and chemists inundated with hayfever sufferers.

Share

CommentComments

Hotels

Luxury hotel to be built on top of old Nazi bunker

A former Nazi bunker is going to the next level – literally – with a luxury hotel to be built on top of it.

Share

CommentComments

Cruise

Could this be the world’s greenest cruise ship?

This new build is set to be sleek and luxurious, and use clean LNG fuel. Oh, and did we mention that you can live on it?

Share

CommentComments

Events

Tourism

Have you secured your spot at The Travel Awards?

Wanna be a part of the glitz and glam that is The Travel Awards? Secure your spot now before tickets sell out!

Share

CommentComments

Aviation

Qantas finds most passengers aren’t tackling jet lag the best way

Think you know how to beat jet leg effectively? Well, don’t be so sure, suggests this new Qantas research.

Share

CommentComments

Tourism

Flavour of the Week: Norwegian’s big reshuffle, Singapore Tourism welcomes new staff + MORE!

Our Flavour of the Week is bursting with the tang of executive reshuffles and zesty fresh faces, best enjoyed with a dollop of sour cream and a few corn chips.

Share

CommentComments

Travel Agents

Agent Wrap: Excite’s award win, Change Makers returns, agents take on India + MORE!

Judging by the length of this Agent Wrap, it’s been a slow week for the trade. Well, slow for a bunch of globe-trotting socialites, that is.

Share

CommentComments

Destinations

Aloha Friday Wrap: Island of Hawaii update, Hawaiian Airlines’ starring TV role + MORE

Looking to brush up on your knowledge of all things Hawaii? Go from novice to expert with this…

Share

CommentComments

Aviation

How Hawaiian Airlines is flying cleaner

Hawaiian Airlines is intent on lowering fuel burn and reducing carbon emissions before, during and after each flight.

Share

CommentComments

Destinations

HTO showcases Hawaiian Islands during MICE famil

Last week, Hawai‘i Tourism Oceania (HTO) hosted a group of professional meeting planners for a MICE famil on Oahu and the Island of Hawaii.

Share

CommentComments

Aviation

Hawaiian Airlines to star in new season of Seven’s ‘Step Outside with Paul Burt’

Every weekly episode of the show’s second season will feature one to two Hawaiian destination stories, along with the chance to win a Hawaiian holiday.

Share

CommentComments

Destinations

Island of Hawaii update: what’s new, and things you probably don’t know

With an abundance of culture and history to share, the island is full of unique experiences and intriguing facts that inspire first-time and returning visitors.

Share

CommentComments