On Friday, Air New Zealand said it would increase its stake in Virgin Australia Holdings Ltd. The company would increase its holdings to 25.9%, said a Reuters report. The move was made to increase the competitiveness of the airline firm in the region.

The company said in a statement that it had received approval from Australia's Treasury. The statement said the government financial agency had approved the request to increase its holding in the Australian firm after raising its stake to around 23% just last June.

Air New Zealand Chief Executive Officer Christopher Luxon said, "The opportunity to take our shareholding in Virgin to 25.9 percent and the recently extended Tasman Alliance with Virgin mean we can confidently work with Virgin to provide a strongly competitive, Australasian and international airline network,"

Air New Zealand is approximately 74% owned by the government of New Zealand. A Reuters report said Wellington had planned to sell a minority stake in the company in the coming years. Meanwhile, Virgin Australia Holdings' major shareholder included Singapore Airlines and Virgin Group.