Etihad buys Virgin Australia stake
12 / 06 / 2012
ETIHAD Airways buys four per cent stake in Virgin Australia (VA) sparking union fears of a takeover.
Forging ahead with its bid to extend its global reach, the carrier reveals it acquired the shares for US$35.6m and is eager to raise its holding to as much as 10 per cent – providing it can gain approval from the Australia’s Foreign Investment Review Board.
Etihad, which began operating in 2003 and has already bought stakes in three other airlines since December, says the purchase will help it to take on rivals, such as Emirates and Qatar Airways.
“Where we see opportunities to improve our business, stretch our networks and take out costs... we’ll consider those accordingly,” says Etihad chief executive officer (CEO), James Hogan.
Meanwhile, some union officials and politicians fear Etihad harbours ambitions to take full control of VA.
But Rob Fyfe, the CEO of Air New Zealand, which has 19.9 per cent stake in VA, says he has “no particular concerns” about the latest development.
In other news, Etihad is launching two new routes to Addis Ababa (Ethiopia) and Ahmedabad (India) in November.
An Airbus A320 will be used for the flights carrying both cargo and passengers, which will depart from the carrier’s base in Abu Dhabi (UAE).