Etihad to end codeshare agreement with Virgin Australia

Passengers will not be able to book Virgin Australia-operated flights through Etihad’s booking channels starting from June next year

Etihad says customers with existing bookings on Virgin Australia flights will not be affected. Jaime Puebla / The National

Etihad Airways has said that it will end its unilateral codeshare and bilateral frequent flyer partnership with Virgin Australia, effective June 1, 2025, citing a “divergence” in the strategic directions of the two airlines.

Once the termination takes effect, passengers will no longer be able to book Virgin Australia-operated flights through Etihad’s booking channels, the Abu Dhabi-based airline said on Monday.

Etihad customers with existing bookings on Virgin Australia flights will not be affected.

“Etihad Airways remains dedicated to serving Australia, as it has since 2007. For summer 2025, the airline will increase its flights to Sydney and Melbourne,” the airline said.

The move comes more than a month after Qatar Airways announced its plan to acquire a 25 per cent equity stake in Virgin Australia, in a deal that includes the Australian carrier launching flights to Doha and providing improved market access for the Gulf carrier as it expands its global network.

The Qatari carrier is purchasing the minority stake from Virgin Australia's owner, Bain Capital, the two airlines said in October. They did not disclose the financial terms of the deal, which is subject to regulatory approval.

Etihad held more than a 20 per cent stake in Virgin Australia, which restructured in bankruptcy in 2020 after the Covid-19 pandemic erased travel demand.

The airline, which was acquired by US private equity group Bain Capital in September 2020, has re-emerged with a smaller fleet, a reduced workforce and a focus on cost-cutting measures.

Meanwhile, Etihad is moving forward with plans to triple passenger numbers to 33 million and double its fleet to 150 planes by the end of the decade. The airline is also preparing for a potential listing – a first for a major Gulf carrier – as part of its growth strategy.

Etihad carried 13.6 million passengers from January to September, a 35 per cent increase compared to the same period last year. Capacity, measured in available seat kilometres, increased 31 per cent year-on-year. Passenger load factor – a measure of how many seats are filled on planes – edged up to 87 per cent in the nine-month period, from 86 per cent from the same time last year.

The airline operates a fleet of 95 aircraft, including five freighters, as of September 30. It flies to 83 destinations, up from 72 in September last year. In October, Etihad announced the launch of flights to Al Alamein, the gateway to Egypt's northern coast on the Mediterranean.

Etihad has interline and codeshare agreements with 40 airlines, including Air France, Turkish Airlines and Egypt Air, according to the airline's website.