Dubai: Etihad Airways has increased its stake in Virgin Australia Holdings to 4.99 per cent, the company said in a statement.

The move comes a day after the Abu Dhabi-based airline announced acquiring 3.96 per cent stake in Virgin Australia, in which British billionaire Sir Richard Branson’s Virgin Atlantic holds a 26 per cent stake.

The company remains interested in building a larger stake over time but will only do so after receiving the necessary regulatory approvals.

 

As per the investment regulation, once a foreign investor acquires a five per cent stake, the airline has to notify the regulatory board for further purchase of shares, James Hogan, Etihad Airway’s President and Chief Executive Officer, told Gulf News..

“Once we pass that stage, we will acquire another five per cent, subject to approval,” he added.

This is the fourth major acquisition announced by the Abu-Dhabi-based airline in six months, following its acquisition of a 30 per cent stake in AirBerlin in December 2011, followed by a 40 per cent stake in Air Seychelles announced in February and a 3 per cent stake in Aer Lingus announced more recently.

The eight and a half-year-old airline, which is growing fast organically, has also taken the acquisition route as part of its growth strategy to reach out to more destinations and passengers worldwide. Etihad Airways, launched by Abu Dhabi Government, has become profitable last year — for the first time. The airline has a fleet of 66 aircraft serving 87 destinations across 55 countries

The move will help Etihad Airways to strengthen its grip in the Australian market and divert more Europe-Australia traffic through to Abu Dhabi.

“What is interesting is that Qantas will be watching with interest,” Saj Ahmad, Chief Aerospace/Airline Analyst at StrategicAero Research, told Gulf News. “This deal effectively gives Etihad access to the domestic market in Australia that Qantas needs — any siphoning off of traffic here will hurt them immensely while boosting Etihads traffic feed as well as that of Virgin Australia.

“There’s no guarantee, if any, that Qantas or its offshoot Jetstar will have seen this coming and they have little choice but to be worried if this stake were to grow.”

Etihad Airways carried 8.3 million passengers last year.