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.
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.