Etihad in $418m deal for more Airbus craft

An Airbus A330 is painted for Etihad Airways in Toulouse in 2009. The national carrier has placed orders for two more of the planes. Gilles Bouquillon for The National

Etihad Airways has bought two more Airbus A330-200 passenger aircraft and upgraded a previous order for seven smaller Airbus A320s to the larger Airbus A321 model, the airline said yesterday.

The announcement came as Singapore Airlines bought 10 per cent of Virgin Australia, in which Etihad already holds a 10 per cent stake.

Etihad's new Airbus A330 aircraft are scheduled for delivery in January and March 2014 in a deal worth US$418 million (Dh1.53 billion) at current list prices, and will bring to 24 the number of A330 passenger jets in its fleet. The airline also operates two A330 freighters.

"The reliable and highly versatile Airbus A330-200 has been an integral part of our global passenger and cargo success," said James Hogan, the Etihad president and chief executive. "As our operations and network continue to grow in scale, we feel the A330-200 is the right fleet type to expand with."

Etihad operates its existing A330-200s on routes to Brussels, Dublin, Frankfurt, Manchester, Munich, Milan, Casablanca, Johannesburg, Lagos, Tripoli, Brisbane, Singapore, Chengdu, Dhaka, Kathmandu, Nagoya, Tokyo and Beijing.

The Airbus A330s will be configured with 22 business class lie-flat beds and 240 economy seats. The aircraft will be powered by Rolls- Royce Trent 700 engines and have a range of 14,000 kilometres.

"Winning a fifth repeat order from Etihad Airways for A330s is without a doubt a strong endorsement for the aircraft's unique combination of unbeatable economics, versatility and fuel efficiency," said John Leahy, the Airbus chief operating officer.

Mr Hogan added:"Our decision to convert seven of our A320s on order into A321s reflects the increasingly strong demand we are seeing across our different routes and we look forward to taking delivery of our first in November 2013."

Virgin Australia's deal with Singapore Airlines, worth A$105m (Dh400.1m), will result in Australia's second-largest airline after Qantas Airways. Virgin Australia is using the cash injection to buy 60 per cent of Tiger Australia, which is 33 per cent owned by Singapore Airlines, for A$35m, and invest a further A$62.5m to increase the fleet size to 35 aircraft from 11 by 2018.

Virgin is also buying the regional and charter carrier Skywest in adeal worth A$93m. Virgin sharesrose as much as 6.5 per cent toA$0.49 on news of the deal andshares in Skywest surged 53 percent to A$0.43.

Etihad has welcomed Virgin Australia's deals with Tiger Airways and Skywest Airlines.

"These investments by Virgin Australia consolidate its position today as Australia's most successful and fastest-developing airline," said Mr Hogan. "The addition of Tiger and Skywest into its portfolio can only help Virgin Australia's competitive position in the Australian market and across the Asia-Pacific region."

Etihad and Virgin Australia's partnership includes code-sharing on flights, joint marketing initiatives and reciprocal earn-and-burn on their frequent flier programmes.

Analysts yesterday said the decision by Singapore Airlines to invest in Virgin stepped up its competition with rival Qantas to preserve its dominant position in the Asia-Pacific premium air travel market and in an effort to deal with its troubled budget associate, Tiger Airways Holdings, whose shares were suspended after the carrier reported an A$18m second-quarter net loss.

Virgin's decision was being seen as an effort to shore up its position following Qantas's proposed 10-year alliance with Emirates Airline, revealed last month.

Etihad has postponed the launch of flights to Addis Ababa after the Ethiopian Civil Aviation Authority rejected the airline's application for the required operating permit.