ETIHAD'S chief executive, James Hogan, says he has made clear to Sir Richard Branson that his airline is interested in his cornerstone stake in Virgin Australia.
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The Abu Dhabi-based airline is pursing equity stakes in ''one or two'' more airlines after building large holdings in Europe's sixth-largest airline, Air Berlin, and Air Seychelles over the past few months.
Etihad has been stymied from taking a cornerstone stake in Virgin because Australia's second-largest airline is on the verge of its 49 per cent foreign-ownership limit.
Sir Richard's Virgin Group has a 26 per cent holding and Air New Zealand 20 per cent.
Speaking from Abu Dhabi yesterday after Etihad posted its first profit, Mr Hogan said Sir Richard's Virgin Group was ''aware of our interests'' in taking an equity stake in Virgin.
''We have been very clear that if stock became available in Virgin Australia we would invest in Virgin Australia,'' he said. ''But at the moment due to the foreign ownership limits that has maxed out.
''We continue to look at other opportunities. There aren't many out there but we believe there may be one or two more plays that we could be involved in.''
Etihad and Virgin gained regulator approval last year for a close alliance on the Australia-Abu Dhabi route. The tie-up is similar to Virgin's deals with Air New Zealand and the US airline Delta.
In a further threat to Qantas's international operations, Etihad will also seek an increase in the limit on the number of its flights to Australia in bilateral talks between the Australian and United Arab Emirates governments later this year. Mr Hogan said Etihad was ''maxing'' its quota of flights to Australia but he declined to say how many more he would be seeking.
Etihad is due to take delivery of the first of 10 A380 superjumbos in late 2014, which it will be put on the so-called kangaroo route between Sydney and London via Abu Dhabi. It also wants to open a lounge at Sydney Airport next year. The airline already operates 21 flights a week between Abu Dhabi and Sydney, Melbourne and Brisbane.
The five-year-old airline yesterday reported a net profit of $US14 million ($12.9 million) for the year, compared with an undisclosed loss previously. The unlisted airline's revenue rose 36 per cent to $US4.1 billion.
Etihad's passenger load factor between Australia and Abu Dhabi averaged about 80 per cent last year, compared with about 76 per cent in 2010.
Airlines from the Middle East and China have been the most aggressive in boosting capacity on routes to Australia in recent years. China Southern has vowed to more than triple flights to Australia to more than 110 within the next four years. Emirates has more than 70 flights a week to Australia.
A Virgin spokeswoman declined to comment yesterday about Etihad's interest in gaining an equity stake.
