Etihad eyes Virgin Australia investment

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Etihad will explore ways of deepening its relationship with alliance partner Virgin Australia as the Abu Dhabi-based airline scouts for new equity investments in Asia Pacific.
Chief executive James Hogan, quoted in this morning’s Australian Financial Review, said it was “very keen” to look at opportunities in “China, in India and elsewhere in Asia”.
And Virgin Australia could be on the radar.
“We have a long term commercial partnership with Virgin and if both John (Borghetti, Virgin’s chief executive) and I considered there was a way to strengthen that, we’d look at that seriously,” Hogan told the AFR.
Any potential deal would be hamstrung though by the 49% cap on foreign ownership of Australian airlines flying international routes.
One reported option could be to split Virgin Australia’s domestic and international operations into two companies, leaving the way clear for Etihad to invest in the domestic business where there are no foreign ownership restrictions.
Overseas interests already control 46% of Virgin Australia with 26% owned by Richard Branson and 20% by Air New Zealand.
Etihad is exploring investments in Asia after raising its stake in Germany’s airberlin from 3% to 29.2%.

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