Etihad to take 10% stake in Virgin Australia
Etihad Airways has been given the green light to increase its stake in Virgin Australia to a maximum of 10%.
The Abu Dhabi-based carrier currently holds a 4.99% stake in Virgin Australia, and had applied to the Australian government’s Foreign Investment Review Board (FIRB) to raise the level of its investment. The acceptance of the bid allows Etihad to further strengthen its global portfolio of airline investments. The carrier currently holds a 40% stake in Air Seychelles, a 29.21% interest in airberlin, and a 2.987% stake in Irish national carrier Aer Lingus, as well as its stake in Virgin Australia.
The deal will also enable Etihad to move further into the Australian market. As part of its existing codeshare arrangement with Virgin Australia, the airline currently operates 24 weekly flights between Abu Dhabi and three Australian hubs – Sydney, Melbourne and Brisbane – with plans for Perth flights in future.
It is facing strong competition however, from Gulf rivals. Emirates recently unveiled plans to add flights to Adelaide, as well as increasing its flight frequency to Perth and flying its Airbus A380 to Melbourne and Sydney. Qatar Airways meanwhile, recently launched services to Perth – its second Australian hub. The three airlines are locked in a battle for the lucrative ‘kangaroo route’ connecting Australia with destinations in Europe, as well as for the broader Australian travel market.
“[Etihad’s] aircraft, office, marketing and selling costs have directly contributed more than AU$540 million (US$557m) to Australia’s GDP,” the airline said in a statement. “Etihad Airways is very proud to have been, and continues to be, a good friend to Australia. At the same time, Australia has been a great success for Etihad Airways. We look forward to building on this long and prosperous relationship.”