Jun 06 2012
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UPDATE: In Expansion Push, Abu Dhabi's Etihad Ups Virgin Australia Stake
Wednesday, Jun 06, 2012
-- Etihad increases stake in Virgin Australia to 4.99%
--Will need Australian regulator approval to lift holding to 5% or above
Of ZAWYA DOW JONES
DOHA (Zawya Dow Jones)--Continuing with its aggressive international expansion push, Etihad Airways said it has increased its stake in Virgin Australia Ltd. (VAH.AU) to 4.99%, while media reports Wednesday suggested the Abu Dhabi-owned carrier is in talks with Air France-KLM (AF.FR) regarding a possible share purchase.
Media reports Wednesday also linked the Abu Dhabi-based carrier and rival Qatar Airways with Air France-KLM.
Spokesmen for both Gulf-based airlines declined to comment on the reports that they are talking to the European carrier about buying a stake.
In December Etihad raised its holding to 29% in Air Berlin PLC (AB1.XE), a move that will see European traffic flow onto its network.
In terms of Etihad 's stake building in Virgin Australia, foreigners investing in Australia need approval from the regulator, the Foreign Investment Review Board, or FIRB, if they plan to take 5% or more of a company.
Etihad has already signaled its intention to increase its holding in Virgin to 10% with the FIRB and is awaiting a decision.
"The company remains interested in building a larger stake over time but will only do so after receiving the necessary regulatory approvals," Etihad said in a brief emailed statement Wednesday. It has accumulated its stake in Virgin over recent weeks through open market shares purchases, it added.
Meanwhile, Dubai-based Emirates Airline--by far the biggest of the Gulf carriers, which has favored organic growth over the years rather than acquisitions, has squashed speculation that it's interested in taking a stake in Australia's Qantas.
"We're not up for buying a stake in Qantas," Tim Clark told Dow Jones Newswires on Tuesday.
Embattled Qantas, suffering from weak passenger demand and high fuel costs, is attempting to restructure its unprofitable long haul business and is cutting costs.
-By Alex Delmar-Morgan, Dow Jones Newswires; +974 6659 9818; firstname.lastname@example.org
Copyright (c) 2012 Dow Jones & Co.
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