ETIHAD Airways says it has received the all clear to double its stake in Virgin Australia to 10 per cent.
The Middle East carrier acquired a 4.99 per cent equity stake in Virgin Australia earlier this year.
Etihad, which has a 10-year partnership with Virgin, says the Foreign Investment Review Board (FIRB) has cleared the way for an increased investment.
Etihad Airways and Virgin Australia operate 24 flights per week between Australia and Abu Dhabi which involves codesharing, reciprocal frequent flyer benefits and joint bidding for corporate contracts.
In a statement today, Etihad said the strategic partnership had 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 said.Etihad entered the Australian market five years ago and currently services Sydney, Melbourne and Brisbane. It has plans to fly to Perth in the future.
It is not the only foreign entity with a large chunk of Virgin Australia shares – Sir Richard Branson’s UK-based Virgin Group has a 26 per cent stake, while Air New Zealand owns 19.9 per cent.
Earlier this year, Qantas Airways called for regulators to take a close look at Virgin Australia’s proposed ownership restructure, by which its international operations would be transferred to a separate, unlisted entity, owned by current shareholders.
Last month Qantas reportedly lobbied government and opposition politicians about Etihad’s desire to invest in Virgin, warning that the Abu Dhabi-based carrier would “cross-subsidise Virgin’s domestic business with the specific aim of weakening Qantas”.
Ref : http://www.news.com.au