Etihad takes 4-per cent stake in Virgin Australia

Etihad Airways has made its intentions to boost its stake in Virgin Australia to at least 10 per cent after confirming it had taken a cornerstone holding in Australia's second-largest airline.

In a move that would bolster Virgin's assault on Qantas' grip on the lucrative corporate market, Etihad revealed it had acquired a 4-per cent stake in the airline's domestic operation, which also has Sir Richard Branson's Virgin Group as also Air New Zealand as shareholders.

According to Etihad chief executive James Hogan, its stake was meant ''not to take control but to lock us in as a partner.''

According to analysts, it would allow the two airlines to share contracts on items such as in-flight entertainment and information technology. 

He added what it gave Etihad was the ability to look at more cost opportunities.

Hogan, whose interest in the airline is well known, said Etihad had been in talks with the Foreign Investment Review Board about gaining approval for increasing its stake in Virgin to 10 per cent.