Jet Airways deal near as Etihad Airways weighs new investment

Etihad plans to add Airbus A380 aircraft - currently on order - from Sydney and Melbourne to Abu Dhabi. David Buerk / Etihad

Etihad Airways is expanding its Australian operations while its acquisition of a 24 per cent stake in India's Jet Airways is only days away, according to the company's president.

The carrier is also planning to increase its equity in Virgin Australia from its current 10 per cent shareholding to 19.9 per cent, subject to regulatory approval. It will also add new aircraft, routes, additional flights and airport facilities for its operations in Australia as part of its growth plans.

"Virgin Australia is a key member of our ever-expanding airline equity alliance and Etihad Airways is an active and long-term investor in Virgin," said Etihad's president and chief executive James Hogan. "We have a significant presence in Australia with 28 weekly departures, annual expenditure of over US$100 million, direct employment of 106 staff and engagement of 415 local contractors."

Etihad plans to add Airbus A380 aircraft - currently on order - from Sydney and Melbourne to Abu Dhabi, construct premium lounges at both Australian airports next year as well as boost the number of flights from Melbourne and Brisbane to the emirate. It will also begin direct flights between Perth and Abu Dhabi.

According to Mr Hogan, the Virgin Australia equity alliance enables the airline to connect with 45 destinations in Australia, New Zealand and South East Asia, while Etihad reciprocates by providing Virgin Australia with connections via Abu Dhabi to Europe and Africa.

The alliance is one of five such partnerships that Etihad has invested in. The company is awaiting approval for its sixth equity alliance with Jet Airways, India's second largest airline by passengers.

The deal should be completed "in the next seven or eight days following final meetings", said Mr Hogan, who highlighted India as a growing market and key area for development despite its problems with high levels of regulation and poor airport infrastructure.

Etihad is acquiring the 24 per cent stake for $379m. The deal still needs approval from the Indian government.

If the partnership goes through it will give Etihad access to a combined total of more than 420 destinations.

Eithad also owns 29.2 per cent of airberlin, 40 per cent of Air Seychelles and also has a 2.9 per cent stake in Ireland's Aer Lingus.

Last week the Abu Dhabi carrier completed a 49 per cent acquisition of Serbia's national airline Jat Airways, to be renamed Air Serbia.