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Etihad Airways has almost doubled its stake in Virgin Australia Holdings in the last two months.
Virgin, in a regulatory filing to the Australian Stock Exchange, confirmed that the Abu Dhabi-based airline has purchased 24,000 more shares valued at A$10.63 million from the market to raise its stake to 6.1 per cent.
In a five-page letter, the owners of Virgin Australia said that Etihad has made purchases in the period from July 24 to August 17 to strengthen its stake.
Etihad on June 6 announced that it had acquired a 3.6 per cent holding in the airline. It purchased 1.4 per cent more shares from then until July 19 to take its holding to five per cent.
Saj Ahmad, chief analyst at London-based StrategicAero Research, said Etihad’s increased stake in Virgin Australia will continue to make headlines until they reach the oft-cited 10 per cent limit currently imposed by regulatory authorities.
In July, the Foreign Investment Review Board, a financial regulator, allowed Etihad to acquire up to a 10 per cent share in the airline, which is facing tough competition in the domestic market.
Etihad chief executive James Hogan told The Australian the carrier would continue to buy shares on-market until it reaches the 10 per cent threshold.
“With Qantas facing domestic pressure from Virgin Australia’s expanding network as well as Etihad snaring international traffic, this partnership will continue to get stronger, providing customers with better connectivity to and from Australia,” Ahmed said.
“Of course, the real gambit is whether Etihad pushes beyond the 10 per cent ownership limit in place at the moment — and there’s every reason to believe that they will.”
Etihad Airways as acquired 2.9 per cent stake in Irish airline Aer Lingus to boost its European profile, with plans to boost its stake to 25 per cent.
In January, Etihad Airways invested $20 million in Air Seychelles to acquire its 40 per cent shares.
(c)2012 the Khaleej Times (Dubai, United Arab Emirates). Distributed by MCT Information Services