Virgin Australia chief John Borghetti says he could have sold a stake in the company's Velocity loyalty program "many times over" and for a bigger price, but chose to sell to private equity firm Affinity Equity Partners because "their reach and their relationships are enormous".
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"What is really important when you do a deal like is the strategic element of it, not the money side of it," Mr Borghetti told the Nine Network's Financial Review Sunday program.
"We could have sold this business many times over with various people and arguably got more money. But what is important is the strategic side."
On Friday, Virgin Australia Holdings unveiled the surprise sale of a 35 per cent stake in its Velocity frequent flyer program to private equity group Affinity in a deal that values Velocity at $960 million.
The announcement came as the budget airline reported a full-year underlying loss of $211.7 million. Rival Qantas reported an underlying loss of $636 million.
Qantas chief Alan Joyce has argued that there was too much risk in selling a minority stake in its frequent flyer business. But Mr Borghetti is hoping that bringing in Affinity will help accelerate the growth of Velocity.
"If it was a business that was matured, my view might be different," he said. "There's no way that we would have been able to grow it [by ourselves] as we will be able to grow it with our partners."
