Etihad Airways chief executive James Hogan says he is yet to start any discussions with alliance partner Virgin Australia about buying an equity stake in the airline.
Expectations Etihad would buy into Australia’s number two carrier have risen in recent times, after Virgin proposed a company restructure to open its share register to more overseas investors and free itself from foreign ownership restrictions.
Mr Hogan says Etihad is keen to continue its buying spree that started at the end of 2011, when the carrier bought stakes in Air Berlin and Air Seychelles.
“Certainly we believe we have one or two more deals we can do in the coming years,” Mr Hogan told a National Aviation Press Club lunch in Sydney on Thursday.
“I’m not going to talk about Virgin Australia, but they would be in this part of the world, Asia or Europe.
“We watch very carefully what’s happening with the changes with Virgin Australia.”
Etihad recently paid 72.9 million euros ($A90.91 million) – a price Mr Hogan described as in the region of a single aircraft, to buy 29.2 per cent of German-based Air Berlin.
Mr Hogan said partnerships such as those with Air Berlin and another with Air Seychelles, would enable exponential growth with low risk.
Equity partnerships allowed airlines to save on costs through sharing of ground staff, maintenance and research and development of in flight products, Mr Hogan said.
Virgin and Etihad have a long-term commercial agreement as part of an alliance which features codesharing on each other’s flights, reciprocal frequent flyer recognition and joint bidding for corporate accounts.
“We haven’t had any discussions, but if we were to enter into a discussion it would be to add to our position out of Australia, as we have with Air Berlin out of Germany,” Mr Hogan said.
In a bid to open up the share register to foreign investors, Virgin Australia in February proposed to split its international operations into a separate, unlisted entity.
The listed company, therefore, would become a wholly domestic airline and be freed from government regulations requiring all Australian flag carriers operating international services to be no more than 49 per cent foreign owned.
Sir Richard Branson’s Virgin Group holds about 26 per cent of Virgin Australia, while Air New Zealand had a 19.9 per cent stake.
This left little room for other non-Australians, be there airlines or institutional investors, to climb onto the share register in any meaningful way.
Mr Hogan said the airline’s 21 flights a week into and out of Australia were performing well with load factors – a measure of how full planes are – running between 78 per cent and 80 per cent.
At 1540 AEDT, Virgin was up one cent at 44 cents.
