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Etihad gets nod to double stake in Virgin Australia

Etihad Airways will be able to double its stake in Virgin Australia Holding, as Australia’s Foreign Investment Regulator has given its nod.

Welcoming the decision made by Australia Foreign Investment Review Board, Etihad Airways said it “will allow Etihad to boost its share of Brisbane-based Virgin to a maximum 10 per cent from 4.99 per cent at present.”

“The airline plans to buy more shares in Virgin following the approval,” Stephen Mahoney, a Sydney-based spokesman at Etihad, said.

“Now that we have approval to do that we will take the action necessary to acquire the equity,” Mahoney said. “We’re in no hurry to do so and we’ll take our time.”

Abu Dhabi based airways acquired 4.99 per cent interest on June 5 to take on Qantas Airways and had sought permission to increase its stake.

Foreigners investing in Australia need approval from the country’s Foreign Investment Review Board if they plan to take five per cent or more of a company.

Etihad Airways in a statement said: “Purchase was made following the development of a highly successful multi-tiered partnership between the two airlines that includes code-sharing on flights, joint marketing initiatives and reciprocal earn-and-burn on their respective frequent flier programmes.”

Together, Etihad Airways and Virgin Australia currently operate 24 flights per week between Australia and Abu Dhabi offering Australian travellers and visitors to Australia greater choice and access to a combined network of more than 285 global destinations.

The strategic partnership has already delivered significant revenues to each airline. It is expected that the equity stake in Virgin Australia will lead to further revenue generating opportunities, the company stated.

The first Etihad Airways flights from Sydney to Abu Dhabi took place in March 2007 and since then it has started flights from Brisbane and Melbourne, with plans for services from Perth in future.

In total, nearly two million passengers have flown with Etihad Airways between Australia and its Abu Dhabi hub.

Etihad Airways has three regional offices and a line maintenance facility in Australia, and now employs more than 300 Australian members of staff who are based in Australia, Abu Dhabi and at stations around the world.

It is estimated that Etihad Airways’ passengers have spent more than A$1.5 billion locally on hotels, tours, restaurants, retail shopping and other tourist activities in Australia.

The airline’s aircraft, office, marketing and selling costs have directly contributed more than A$540 million to Australia’s GDP.

“We look forward to building on this long and prosperous relationship,” the company said. 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 and Air Seychelles.

haseeb@khaleejtimes.com