Abu Dhabi’s Etihad eyes ‘long-term game’ in Australia

Published: Updated:
Read Mode
100% Font Size
3 min read

Etihad Airways chief James Hogan says the carrier is in Australia for the “long-term game” amid speculation that it was behind a flurry of Virgin share purchases this week.

Hogan confirmed the Abu Dhabi-based carrier was “buying on the market at the moment” after winning Australian government approval to increase its 10 percent stake in Virgin Australia to 19.9 percent.

“We are in this for the long-term game, so there is no rush,” Hogan said in an interview with The Australian newspaper Wednesday.

“It is not a race. [Virgin] are at a very specialized area of the world; we are in the Middle East. I'm confident we will be able to find more areas of commonality, but it's a long game.”

Hogan said share purchases would be guided by whether “it is at a fair price and the right price”.

“This is about our options and we continue to work through that.”

There was speculation Etihad was on the prowl after a large parcel of Virgin shares sold Tuesday for almost Aus$7 million (US$6.5 million).

Etihad refused to confirm or deny whether it was behind the transaction.

“We applied for and received Foreign Investment Review Board approval to increase our previous stake of 10 percent in Virgin Australia to 19.9 percent,” an Etihad spokesman told AFP.

“We may purchase available shares to increase our shareholding where it is prudent to do so, and will provide notice in accordance with regulatory disclosure requirements.”

Under Australian law Etihad must provide formal notice to the stock exchange if it increases its total holdings in a transaction by more than one percent.

Virgin is the major domestic rival to dominant Australian airline Qantas and interest in the budget carrier has intensified in recent months as competitors seek access to the nation's lucrative aviation market.

Qantas sealed a major alliance with Emirates earlier this year to bolster its international business, prompting counter-manoeuvres from its rivals.

Air New Zealand boosted its stake in Virgin to 23 percent last month, making it the single largest shareholder behind Singapore Airlines, which also bumped up its holding in April to 19.9 percent.

Hogan said Etihad had a “great” relationship with Air New Zealand and “amicable” ties with Singapore Airlines, code-sharing on cargo routes.

He conceded that Virgin's links with Singapore Airline “has had a slight impact” on Etihad, “as you would expect”, but said it was a positive thing overall.

“It allows [Virgin] to have extra strength against Qantas,” Hogan said. “Having us and Singapore gives the group strength against Qantas.”

Top Content Trending