Etihad Airways ups stake in Australia to 10%

Etihad Airways said on Sunday its stake in Virgin Australia Holdings (VAH.AU) has now reached 10 per cent but the Abu Dhabi-owned airline ruled out becoming a majority shareholder or taking control of the Australian carrier. Etihad received approval from Australia’s Foreign Investment Review Board in July to take its Virgin Australia holding to a maximum 10 per cent, from five per cent. Etihad has recently taken a number of minority equity stakes in airlines as it forges a network of international partners to funnel traffic in and out of its hub in Abu Dhabi. “We support the management strategy of Virgin Australia and will continue to work closely with them on ways to improve our business,” said Etihad’s Chief Executive James Hogan in an emailed statement. “Our small equity stake reflects the strong working relationship of both airlines and again demonstrates our enduring commitment to the Australian market.” Hogan reiterated that Etihad has no interest in becoming a majority shareholder or taking control of Virgin Australia. Etihad first acquired a stake in Virgin Australia in June. During the second quarter of this year, it also snapped up minority stakes in Irish carrier Aer Lingus Group PLC and added to its shareholdings in Air Berlin PLC and Air Seychelles. Virgin’s ability to offer a minority stake in the company can also make alliance deals appear more enticing to potential partners. It has also signed alliances with Singapore Airlines, Air New Zealand and Delta Air Lines Inc. as it attempts to steal premium customers from Qantas, and has started rolling out business-class seats on its Australian domestic fleet.