Continuing acquisition spree Etihad buys 3.96 per cent stake in Virgin Australia
The UAE based Etihad Airways has acquired a 3.96 per cent stake in Virgin Australia, the fourth major acquisition in the last six months, the airlines announced Tuesday.
Etihad says it has been quietly buying shares on the open market for some time.
"The stake has been built over recent weeks, through purchases on the open market," the airline said.
"Etihad Airways believes that this equity investment in Virgin Australia's domestic operations significantly strengthens the 10-year strategic partnership forged by the two carriers in August 2010," the official statement said.
Etihad runs a total of 21 flights a week to the Australian cities of Sydney, Melbourne and Brisbane, while Virgin Australia has been operating three flights a week from Sydney to Abu Dhabi since last year.
The UAE airline showed itself to be willing to take major stakes in rival operators, when last year it bought nearly 30 per cent of Germany's Air Berlin and followed it up by acquiring 40 per cent of Air Seychelles and nearly 3 percent in Irish carrier Aer Lingus.
The purchases are a way for Etihad to gain an edge over larger Gulf rivals Emirates and Qatar Airways.
"We're building a strong business model. And part of that business model is partnerships," Etihad CEO James Hogan was reported by The Associated Press as saying.
"We do have two large competitors on our doorstep. And we will never match their aircraft order book."
Etihad spent $35.6 million on the 3.96 per cent stake in Virgin, Australia's second biggest airline, and aims to acquire as much as 10 per cent of the Australian carrier, Hogan revealed.
Virgin Australia, which is part of Richard Branson's Virgin Group, confirmed the deal in a brief statement to the Australian Securities Exchange.
Virgin Australia posted a loss of Aus $67.8 million ($66.2 million) during the last fiscal year, which ended June 30, 2011.
Source: Middle East News.Net
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