Etihad increases stake in Virgin Australia

AccomNews Sunday, September 2, 2012

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Etihad Airways has confirmed its equity stake in Virgin Australia Holdings has now reached 10%.

This represents 221 million shares which have been bought on the open market over recent months. Six weeks ago Etihad Airways received Foreign Investment Review Board (FIRB) approval to increase its holding from 5% to 10%.

Etihad Airways president and CEO, James Hogan, said, “We support the management strategy of Virgin Australia and will continue to work closely with them on ways to improve our business.”
Mr Hogan again reiterated that Etihad Airways was not interested in becoming a majority shareholder or taking control of Virgin Australia. “Our small equity stake reflects the strong working relationship of both airlines and again demonstrates our enduring commitment to the Australian market,” he said.

Etihad Airways and Virgin Australia have developed a highly successful, multi-tiered partnership that includes code-sharing on flights, joint marketing initiatives and reciprocal earn-and-burn on their respective frequent flier programs.

Mr Hogan said he was confident the equity stake would lead to more revenue generating opportunities. “This further cements our commercial partnership as we continue to explore areas of even closer co-operation such as operational synergies, shared IT infrastructure and other forms of cost sharing efficiency.”

Etihad and Virgin operate 24 flights per week between Australia and Abu Dhabi that involves codesharing, reciprocal frequent flyer benefits and joint marketing.

Etihad has also amassed minority stakes in overseas carriers Air Berlin, Air Seychelles and Aer Lingus. The purchases are a way for Etihad to gain an edge over larger Gulf rivals Emirates and Qatar Airways.

Other foreign entities with a significant stake in Virgin Australia, the country’s second-largest carrier, include Sir Richard Branson’s UK-based Virgin Group and Air New Zealand.