Etihad Could Invest In Virgin Australia

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Published: January 25, 2012

Etihad Airways could consider taking a stake in alliance partner Virgin Australia as the Middle Eastern carrier looks for new investment opportunities in Asia-Pacific, the Australian Financial Review reported on Wednesday.

Etihad chief executive James Hogan told the newspaper that the airline was keenly looking at investment opportunities in China, India and elsewhere in Asia.

“We have a long-term commercial partnership with Virgin and if both John (Borghetti, chief executive of Virgin) and I considered there was a way to strengthen that, we’d look at that seriously,” Hogan said.

Any deal would have to get around the 49 percent foreign ownership limit on Australian airlines that fly on international routes.

Virgin Australia’s foreign equity quota is currently sitting at 46 percent, with 26 percent held by Richard Branson and 20 percent by Air New Zealand.

The paper said that one option that Virgin was considering to circumvent the cap was to spilt the domestic and international businesses into two companies, making way for overseas investment.

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