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Australian Workers’ Union secretary Paul Howes has warned that there could be a “national crisis in aviation” if Virgin Australia’s domestic operations were taken over by its partner Etihad Airways as the Abu Dhabi carrier increased its stake to 4.99 per cent.
“The company remains interested in building a larger stake over time but will only do so after receiving the necessary regulatory approvals,” the airline said in a statement on June 6, after previously revealing that it had acquired a 3.96 per cent stake the day earlier.
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Mr Howes said that Virgin had been setting itself up for foreign acquisition after it split its domestic and international operations earlier this year, and that the domestic airline could be used by Etihad to attack Qantas’s domestic market.
“Unfortunately it could be Australian aviation workers who are the victims of an ego fight between the royal families of the UAE and Dubai,” said Mr Howes told The Daily Telegraph, referring to the battle between Emirates and Etihad, both of which are expanding globally.
Independent Senator Nick Xenophon also added his concern about a possible takeover of Virgin and called on the government to use the national interest test on any further investment by Etihad.
“This latest move has huge implications for Australian aviation and could well trigger a similar move by Qantas, who will no doubt argue for a level playing field,” he said.
“It also could have flow-on effects for international routes operated by Qantas and Virgin even though the purchase relates to the domestic airline.”
As well as the Etihad stake, Virgin Australia’s other major shareholders are Britain’s Virgin plc with a 25.93 per cent stake, and Air New Zealand which has a 19.99 per cent stake.
MF
says:This is absolute rubbish… why should this signal any change in the current market. Qantas and Mr Joyce are doing a good enough job of shutting qantas down by themselves. Why should the small acquisition be treated like its a take over. These union officials are looking out for one thing. themselves.
Chris
says:Editor, do you think the time is ripe for EK to buy into QF. With the share price so bady depreciated based on a last minute shock ASX release, surely this is part of the QF strategy?
Cooper
says:My guess is that Etihad would easily be able to stop Emirates from buying a share in QF as the Dubai royal family owes Abu dhabi a great debt. During the GFC Abu Dhabi freed Dubai of a lot of their debt from failed projects.
There is no need for panic yet as Etihad has only stated at this time it wants 10%. That’s not a takeover.
Also whilst everyone is upset over the threat of the “national carrier”, hardly anything has been said in the past five years as the Qantas Group has tried to drive Virgin into the ground. A taste of their own medicine perhaps?
arg
says:Air NZ has a 20% interest in Virgin and the unions think that a 5% stake of an Arab airlne is a threat to inflated Aussie pay packets…comical…
Michael Anderson
says:Qantas Int is dead. Who would want to touch such a dog !!!
Dante
says:Ansett was 100% owned by a foreign airline and still failed. What has Qantas got to worry about anyway as they still have 65% of the domestic market and they seem to be able to increase domestic capacity at will to make it non-viable for another airline to operate . Joyce needs to go and possibly most of the Qantas board because they are the biggest threat to the airline. The decision of this board and the Dixon board to buy planes that hadn’t not even flown was insane . With a sizable chunk of the existing fleet approaching 20yo they needed to buy planes that had already proved themselves and were available in the short to medium term. Once the fleet was younger and more fuel efficient then they could have considered the A380 and B787.