Etihad Airways has sold its stake in Swiss-based carrier Darwin Airline, its first divestment since the airline began a review of its international investment strategy last year.
Darwin Airline announced on Thursday that Etihad, which held a 33.3 per cent stake in the airline, and other shareholders had sold their shares to a Swiss-based subsidiary of Slovenia's Adria Airways for an undisclosed sum.
Etihad acquired its shareholding in Darwin in late 2013. The airline was rebranded as Etihad Regional, and was intended to act as a feeder network for Etihad passengers into a wide range of European destinations.
The transfer of ownership means that Darwin will no longer use the Etihad Regional brand, and will instead now be known as Adria Airways Switzerland.
Adria Airways chief financial officer Heinrich Ollendiek will replace Maurizio Merlo as Darwin Airline chief executive.
"The decision to sell this minority stake in Darwin is a result of the ongoing strategic review of our investments and a decision to concentrate on our other partnerships," said Kevin Knight, Etihad Aviation Group's chief of strategy.
The sale comes less than three weeks after the departure of Etihad's long-standing chief executive James Hogan.
During his 11-year tenure, Mr Hogan sought to build up Etihad as an international player to rival Qatar Airways and Dubai's Emirates by way of international acquisitions, a number of which were in troubled airlines.
While a number of these acquisitions paid off for Etihad, others, including Germany's Air Berlin and Alitalia, have proved a headache for the UAE-based airline.
Air Berlin reported a €782 million (Dh3.31 billion) loss in 2016, with losses widening in the first quarter of the year. Alitalia meanwhile entered government-supervised administration in May, with Etihad saying that it would no longer invest in the airline, after Alitalia employees rejected the terms of a restructuring plan.
Faced with such problems, Etihad announced a review of its international operations late in 2016.
One early sign of the shift in Etihad's strategy was its decision last month to walk away from negotiations with German tourism operator Tui group over a joint venture between the company's Tui Fly airline and Air Berlin subsidiary Niki.
The divestment of Darwin may be a trial run for the sale of other international stakes, according to Will Horton, senior analyst at aviation consultancy Capa.
"Even when putting aside the financial merit for Etihad's airline investments and instead considering only strategic alignment, Etihad Regional was weak," he said in response to emailed questions.
"The sale clears the way to consider divesting larger airlines. If there was resistance to digesting Etihad Regional, it would have been a bigger ask to reconsider the other investments."
A sell-down in other stakes was not a given, however, according to other analysts.
"Darwin is a minnow compared to Etihad's other stakes, so no hasty conclusions can be drawn as to whether other more substantial stakes may be sold down," said John Strickland, an aviation analyst at the London-based JLS Consulting.
Etihad did not respond to questions about its future divestment plans and its strategic review.