Etihad Airways of Abu Dhabi has received clearance from the Australian government to increase its equity stake in Virgin Australia to a maximum of 10 per cent – double its current holding.
Eithad has been on the warpath over the extra share to boost its presence in Australia via Virgin Australia – who they have boosted their relationship recently with joint announcements of codeshare flights, joint marketing initiatives and reciprocal earning and redemption rights on respective frequent flyer programmes.
The cost to Etihad? A$40 million. Not peanuts, but still cheap to buy their way into a market.
Meanwhile in other corner, Qantas is fuming, with them objecting to the purchase as the airline will have viability issues thanks to the extra cash injection.
How much of a corner Qantas has painted itself is now the big question. Qantas has had some major issues, from grounding the entire airline, to cutting routes, to even splitting the International flights into a separate business unit.
Either that – or Qantas is trying to buy sympathy. Which it seems it didn’t do very well.
For Etihad, they could ramp up their ownership up to 19.99% before they have to declare a takeover interest. They are choosing not to – for now it seems. For Qantas, this could be the makings of a real competitor against them – something they really have’t had to deal with since the collapse of Ansett as Virgin Australia goes from no-frills to added frills.
This could get messy… quickly.
What is more certain than Alan Joyce of Qantas moaning, is that I have a competition, and there WILL be a winner shortly after 23:00 on 22nd July! Head to http://economyclassandbeyond.boardingarea.com/2012/07/19/its-another-small-ghettoife-com-giveaway/ for the details and the skinny on entering!