Etihad and Virgin Australia signed a 10-year strategic partnership agreement in August 2010 that spans codesharing on flights, joint sales and marketing activities. Daniel Munoz / Reuters
Etihad and Virgin Australia signed a 10-year strategic partnership agreement in August 2010 that spans codesharing on flights, joint sales and marketing activities. Daniel Munoz / Reuters

Abu Dhabi’s Etihad Airways lifts stake in Virgin Australia to 19.9%



Etihad Airways has upped its stake in Virgin Australia to nearly 20 per cent, extending its influence in the fiercely competitive Australian market.

The Abu Dhabi airline said yesterday it had raised its investment to 19.9 per cent from 10.50 per cent through a series of on-market purchases of shares in recent weeks.

The move underlines Etihad’s desire to grow its global reach through equity alliances. It already owns stakes in airberlin, Air Seychelles, Aer Lingus, and in January will complete a 49 per cent acquisition of Air Serbia.

“We are delighted to have reached this milestone,” said James Hogan, Etihad’s president and chief executive. “It reflects our strong support for the business strategy and management team of Virgin Australia and our enduring commitment to the Australian market.

“It also reflects the close working relationship between our two airlines and we look forward to strengthening its commercial foundations.”

Australia’s Foreign Investment Review Board gave Etihad the green light in June for the carrier to extend its stake in Virgin Australia Holdings to 19.9 per cent.

Etihad’s backing of Virgin Australia chimes with its goal, similar to that of Emirates Airline, in routing more long-haul traffic through its domestic hub. The Dubai-based carrier announced an alliance agreement with Qantas in September last year, a deal that has helped to stem losses in international routes for the Australian airline.

Etihad and Virgin Australia signed a 10-year strategic partnership agreement in August 2010 that spans codesharing on flights, joint sales and marketing activities. It also allows passengers mutual use of the airlines’ respective frequent flyer schemes.

“The strategic partnership continues to deliver significant revenue streams and other benefits to each airline,” said Mr Hogan.

“Increasing our equity in Virgin Australia will further enrich the commercial benefits which the partnership delivers for both airlines as well as increasing the benefits to Australian travellers and visitors to Australia.”

The Brisbane-based company’s main shareholders have been jockeying for greater control in the airline as it seeks to break the estimated 65 per cent share of Qantas Airways on the domestic market. Etihad now holds more than 515 million shares and holds an equal stake in the airline to Singapore Airlines, which bought a tranche of shares from Sir Richard Branson’s Virgin Group in April.

Another of Virgin’s key partners, Air New Zealand, was last week given the go-ahead by Australian authorities to up its share from 22.9 per cent to 25.9 per cent.

In a bid to compete with Qantas, Virgin Australia has reportedly taken out credit lines with Etihad, Air New Zealand and Singapore Airlines as well as assistance through a joint venture with the Samoan government.

Virgin Australia’s operating cashflow dipped by 51.3 per cent in the last financial year to A$184.2 million (Dh638.24m) from A$378.6m in the year earlier period.

The airline’s balance sheet has been hit by the cost of taking over the regional carrier Skywest Airlines, as well as a rise in unemployment in Australia and a depreciation of the Australian dollar, which has inflated fuel costs.

In contrast, the performance of Qantas has improved. It made a net profit of A$6m in the year ending 30 June, overturning a loss of A$244m a year ago.

“It is indeed a reversal of fortunes, with Virgin Australia plunging into the red and its exceptionally weak balance sheet bearing battle scars from a bitter domestic dogfight,” wrote Daniel Tsang, of Aspire Aviation, an aviation research company, in a research report.

Etihad began flying to Australia in March 2007, when it launched services to Sydney. Flights to Melbourne and Brisbane followed in 2009. It plans to operate routes to Perth in Western Australia in the future.

In addition to its existing equity alliances, Etihad will acquire 24 per cent of India’s Jet Airways when final regulatory approval is given. It also has codeshare partnerships with 47 airlines worldwide.

tarnold@thenational.ae

Haircare resolutions 2021

From Beirut and Amman to London and now Dubai, hairstylist George Massoud has seen the same mistakes made by customers all over the world. In the chair or at-home hair care, here are the resolutions he wishes his customers would make for the year ahead.

1. 'I will seek consultation from professionals'

You may know what you want, but are you sure it’s going to suit you? Haircare professionals can tell you what will work best with your skin tone, hair texture and lifestyle.

2. 'I will tell my hairdresser when I’m not happy'

Massoud says it’s better to offer constructive criticism to work on in the future. Your hairdresser will learn, and you may discover how to communicate exactly what you want more effectively the next time.

3. ‘I will treat my hair better out of the chair’

Damage control is a big part of most hairstylists’ work right now, but it can be avoided. Steer clear of over-colouring at home, try and pursue one hair brand at a time and never, ever use a straightener on still drying hair, pleads Massoud.

Jigra
Director: Vasan Bala
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
Rated: 3.5/5