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MELBOURNE - Australian infrastructure firm Toll Holdings plans to hold on to its 62 per cent stake in Virgin Blue Holdings, Australia's second-biggest airline, at least until June.
The decision comes as Virgin Blue's bigger rival, Qantas Airways, talks to suitors, led by Macquarie Bank, who are working on a A$10 billion ($11.6 billion) takeover offer for Australia's top airline.
Toll inherited the holding in Virgin Blue when it took over Australia's biggest ports operator, Patrick, in May, and had said it would review the holding by December.
Toll said yesterday a review had confirmed its view that the business would boost value for its shareholders. It said it would complete a further review around the end of the 2007 financial year, which finishes on June 30.
Toll managing director Paul Little said a range of steps, including the introduction of active fuel hedging and a frequent-flyer programme, had helped Virgin and earnings would improve further as it started flying Embraer planes.
"The addition of the Embraer to the fleet, together with the potential trans-Pacific international long-haul service, offers Virgin some exciting prospects," Mr Little said in a statement.
The lucrative route out of Australia to the United States is dominated by Qantas. Virgin Blue has yet to decide on whether to launch flights on that route.
Toll is also in the process of reviewing its air freight business, which all goes to Qantas. The new air freight strategy was likely to include a key role for Virgin Blue, Little said.
Virgin Blue shares were down 0.5 per cent to A$2.10 in a broader market down 1.3 per cent.
- REUTERS
