Etihad Airways has purchased more than $10 million worth of Virgin Australia shares in the past three weeks as it increases its stake in its alliance partner.
The Abu Dhabi based carrier earlier won approval from the Foreign Investment Review Board to increase its stake in Virgin Australia form five to 10 per cent. The purchases over the past month bring its stake to roughly 6.1 per cent, and CEO James Hogan said it would continue to purchase shares until it reaches the 10 per cent threshold.
“It is in the hands of the market,” Mr Hogan said during a recent visit to Australia, referring to the pace of the share purchases. “It is not a race. We will get to 10 per cent.”
Etihad paid between 38.6c and 45.3c per share between July 24 and August 17, according to a disclosure to the Australian Securities Exchange yesterday.
Mr Hogan has said Etihad might later seek to increase its share in Virgin to as much as 19 per cent but said Etihad would never seek to control the airline. Etihad has made investment in other airline a key part of its business strategy, taking stakes in Air Seychelles, Irish carrier Aer Lingus and Germany’s Air Berlin.
Virgin earlier this year split its foreign and domestic operations into separate business in a bid to open the way for greater foreign investment in its domestic operations.