Sunday, Aug 11, 2013

(This story was originally published on Wednesday.)

DUBAI (Zawya Dow Jones)--Etihad Airways on Wednesday said it would expand operations to Australia from its Abu Dhabi hub, increasing the number of flights it operates and adding additional aircraft and routes, as Gulf carriers seek to capture more traffic from Australasia and Asia.

The airline, which holds an equity stake in Virgin Australia, will commence flights to Perth and add additional flights to Melbourne and Brisbane, according to an emailed statement. Flights to both Sydney and Melbourne will also now be serviced by an Airbus A380, while the airline will build premium lounges at both airports in 2014, the statement added.

"Virgin Australia is a key member of our ever-expanding airline equity alliance, and Etihad Airways is an active and long-term investor in Virgin," James Hogan, chief executive of Etihad, said in the statement. "We have a significant presence in Australia, with 28 weekly departures, annual expenditure of over $100 million, direct employment of 106 staff and engagement of 415 local contractors," he added.

Etihad is looking to increase its equity in Virgin Australia, following recent approval by the Foreign Investment Review Board to raise the Abu Dhabi carrier's shareholding to 19.9% from 10% currently. The Virgin Australia partnership enables Etihad to connect with 45 destinations in Australia, New Zealand and South-East Asia, Mr. Hogan added.

Etihad said last week it would acquire a 49%-stake in Jat Airways, Serbia's national carrier, as the Abu Dhabi-based airline continues to expand globally through codeshare agreements, partnerships and equity stakes in other carriers. It signed a five-year contract to manage Jat Airways, which will change its name to Air Serbia. It also won approval last week on a proposal to buy a 24% stake in India's Jet Airways.

In addition to Virgin Australia and Air Serbia, Etihad currently also holds stakes in Germany's Air Berlin, Ireland's Aer Lingus PLC and Air Seychelles.

Etihad's expansion in Australia follows similar moves by its Gulf rival Emirates Airline, which finalised an alliance with Qantas Airways in March to codeshare on flights, share marketing activities and merge frequent flier programs.

Write to Rory Jones at rory.jones@dowjones.com

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(END) Dow Jones Newswires

11-08-13 0526GMT