Etihad Airways CEO denies interest in buying Air New Zealand’s unwanted stake in Virgin Australia

WITH six succinct words, Etihad Airways’ CEO James Hogan shot down talk of Virgin Australia becoming an Arab-owned airline anytime soon.

VIRGIN Australia appears unlikely to become an Arab-owned airline anytime soon with the boss of Etihad Airways hinting he would not go after Air New Zealand’s apparently unwanted stake in the carrier.

A day after Air NZ announced it was exploring its options with respect to its 25.9 per cent shareholding in Virgin, Etihad CEO and President James Hogan said his airline was “a partner not a predator”.

Addressing a Melbourne City Football Club lunch in his hometown, Mr Hogan said he was unable to comment on the Air NZ move because Etihad was a board member.

But he was very positive about the Virgin partnership, saying he was “committed for the long term.”

Etihad has a 25.1 per cent stake in Virgin and the acquisition of Air NZ’s shareholding would effectively give the airline ownership, subject to Foreign Investment Review Board approval.

Singapore Airlines has a 22.8 per cent stake in Virgin and a seat on its board.

Etihad Airways’ chief executive James Hogan and Virgin Australia chief executive John Borghetti. Picture: Supplied

Despite the storm of speculation about Air New Zealand’s move and the future ownership of Virgin Australia, IG market analyst Evan Lucas said he wouldn’t expect to see an “Etihad Australia” anytime soon.

“From an Etihad perspective, you’d have to ask “is Australia your core future port or is Europe?”,” said Mr Lucas.

“Judging by what they’ve done in the past, you’d have to say Europe.”

He said the other issue was that Air New Zealand would likely want a premium price for its stake from Etihad or Singapore Airlines.

“I think Air NZ has realised their investment in Virgin is better off on their own balance sheet and they can get the same benefits through a codesharing agreement rather than a financial partnership,” Mr Lucas said.

“The airline market is still very, very cautious. Airlines are not really blowing the lights out with their balance sheets.”

Mr Hogan was keen to talk up the June 1 arrival of Etihad’s flagship A380 in Melbourne featuring the exclusive Residence product.

The use of the super jumbo will coincide with the opening of the new Etihad lounge at Melbourne Airport next month.

Originally published as Etihad Airways CEO denies interest in buying Air New Zealand’s unwanted stake in Virgin Australia