UAE carrier expected to boost shareholding by a further 1.66% after getting approval from Australia authorities
Dubai: Etihad Airways upped its stake in Virgin Australia to 21.24 per cent on Monday following regulatory approval by the Australian Foreign Investment Review Board (FIRB).
Etihad, which held 19.9 per cent before Monday, is now expected to move again to increase its approved shareholding in the Australian carrier by 1.66 per cent with a purchase on the open market.
“Etihad Airways has Foreign Investment Review Board approval to increase its shareholding in VAH (Virgin Australia Holding) to 22.9 per cent,” stated an Etihad spokesperson.
Etihad has been waiting several months on regulatory approval after just 25 per cent took up an offer of new shares by Virgin Australia last year. Etihad, along with Air New Zealand and Singapore Airlines, backed the capital raising effort that raised 350 million Australian dollars (Dh1.19 billion). Air New Zealand and Singapore Airlines have since lifted their stakes.
Monday’s FIRB approval follows a fierce Qantas campaign against Virgin Australia’s foreign ownership structure. Will Horton, senior analyst at CAPA — Centre for Aviation, stated “that Qantas could use [Etihad shareholding increase] to underscore its point.”
Etihad, Air New Zealand and Singapore were offered seats on the Virgin Australia board around the time of the capital raising entitlement. Since then, Air New Zealand and Singapore have proposed their own partnership, which is waiting regulatory approval.
However, Horton stated that, “The topic to watch is how Virgin’s three airline shareholders jointly sit on Virgin’s board and perhaps how quickly Air New Zealand and Singapore Airlines work in tandem.
Analysts have warned that Etihad may have to protect its interests in Virgin Australia if Air New Zealand and Singapore Airlines decide to drive the Australian carrier in their own direction.
Etihad and Virgin Australia fly 28 times a week from Abu Dhabi to Australia. However, this will increase to 35 flights in July when Etihad launches its daily Perth service.