Etihad Airways buys 4.99 per cent stake in Virgin Australia

Etihad Airways, the national airline of the United Arab Emirates (UAE), has announced it has acquired a 4.99 per cent equity stake in Virgin Australia Holdings.

The stake has been built over recent weeks, through purchases on the open market. No details were revealed about the price Etihad paid for the stake or whether it plans to increase the stake in the future.

Etihad made the announcement on Wednesday, correcting an earlier statement made on June 5 that it had acquired a 3.96 per cent stake.

Etihad Airways said it believes that this equity investment in Virgin Australia's domestic operations significantly strengthens the 10-year strategic partnership forged by the two carriers in August 2010.

Together, the two carriers operate 24 flights a week between Abu Dhabi and Australia - Etihad Airways with 21 and Virgin Australia with three flights.

Passengers have access to a combined network of more than 150 destinations.

In May, Etihad Airways leased a Virgin Australia Boeing 777-300ER for use on its route between Abu Dhabi and Kuala Lumpur.

Etihad Airways began flying to Australia in March 2007, when it launched services to Sydney. Later, Melbourne and Brisbane were added.

Nearly 2.2 million passengers have travelled between Abu Dhabi and these three cities in the last five years.

The eight-year old Etihad has been actively seeking stakes in overseas carriers to help it compete with regional rivals Emirates and Qatar Airways.

In December 2011, Etihad acquired a 30 per cent stake in AirBerlin, followed by a 40 per cent stake in Air Seychelles in February and a three per cent stake in Aer Lingus, the flag carrier of Ireland.