Etihad Airways has been given the go-ahead by regulators to raise its stake in Virgin Australia to a maximum of 10 per cent.
The UAE flag carrier had made clear its intentions to acquire a greater stake earlier this year and currently owns 4.99 per cent of the Australian airline.
"The [initial] purchase was made following the development of a highly successful multi-tiered partnership between the two airlines that includes code sharing on flights, joint marketing initiatives and reciprocal earn-and-burn on their respective frequent flier programmes," Etihad said.
Etihad said it had applied to Australia's review board for foreign investments to raise the level of its stake and that the request had now been approved.
This month, it posted a record jump in second-quarter revenues, in part due to strategic partnerships with airlines such as Virgin Australia that have been built up this year.
So far this year, Etihad has taken minority equity stakes in Virgin Australia, Aer Lingus and Air Seychelles. It also has a large stake in Air Berlin.
These partnerships and code shares together fed 800,000 passengers into Etihad's network in the first six months of this year, and contributed US$281 million (Dh1.03 billion) to revenues.
Revenue for the first half was $2.24bn, up 29 per cent from $1.73bn for the first half last year.
Together, Etihad Airways and Virgin Australia currently operate 24 flights per week between Australia and Abu Dhabi.
It is expected the equity stake in Virgin Australia will lead to further revenue-generating opportunities, Etihad said.
In total, nearly 2 million passengers have flown with Etihad Airways between Australia and its Abu Dhabi hub. The airline now employs 300 Australian staff and claims its passengers have spent more than A$1.5bn (Dh5.74bn) on hotels, tours, restaurants, retail shopping and other tourist activities in Australia.
It also sponsors the Etihad Stadium, an Australian-rules football venue on the Melbourne docklands. Etihad flights between Abu Dhabi and Australia first started in 2007, with a connection with Sydney.
Flights to the UAE capital have since started from Brisbane and Melbourne and Perth will be added.
Etihad also now has a 2.99 per cent stake in Aer Lingus, a 40 per cent stake in Air Seychelles and a 29 per cent stake in Air Berlin.
iPad users can read the digital edition of business section as it was printed via our e-reader app. Click here