Etihad Airways takes stake in Aer Lingus
DUBAI, United Arab Emirates—Fast-growing Etihad Airways has taken a nearly 3 percent stake in Aer Lingus as part of a strategy to build closer bonds with the Irish carrier, the airline said Tuesday.
The move appears part of a wider Etihad effort to seek stakes in overseas carriers to gain a possible edge in its rivalries with Gulf carriers Emirates and Qatar Airways. It did not disclose how much it paid for the shares.
"Etihad Airways believes a possible partnership could produce significant commercial benefits for both airlines," the Abu Dhabi-based airline said in a statement announcing the deal.
Etihad executives were not immediately available for further comment.
Aer Lingus confirmed the purchase. It said in a statement to the Irish Stock Exchange that it has been in talks with Etihad about codesharing deals, which are arrangements between carriers that allow them to market flights on each other's networks.
The Irish airline added that "future discussions may explore additional commercial and cost opportunities to develop a closer working relationship," but that the outcome of those talks is uncertain. For now, Aer Lingus said it does not expect Etihad to boost its stake further.
Etihad in recent months has bought a nearly 30 percent stake in Airberlin and 40 percent of Air Seychelles as it seeks an advantage over its larger Gulf rivals.
Aer Lingus has long been rumored to be on Etihad's radar.
While not commenting directly on a tie-up with the Irish carrier, Etihad CEO James Hogan has expressed an interest in pursuing further acquisitions or significant minority stakes in other airlines to expand its reach.
The carrier suggested its Aer Lingus buy could be the start of a deeper partnership.
The oil-rich Abu Dhabi government set up Etihad in 2003 and remains its sole owner. It operates 10 flights a week from the Emirati capital to Dublin.
Last month, Etihad said its sales jumped 28 percent to $989 million in the first quarter of the year as it pushed ahead with its rapid expansion.
In February, Aer Lingus reported a strong growth in profits for 2011 despite the country's economic downturn. Its earnings last year rose 66 percent to euro71.2 million ($95.6 million).
Etihad's acquisition strategy sets it somewhat apart from its Gulf rivals.
The head of Qatar Airways told reporters Tuesday that his carrier is not looking to acquire another airline for now.
Qatar Airways Chief Executive Officer Akbar al-Baker said the airline is focused on building its own business and doesn't want to take on the financial problems of restructuring a weaker carrier. Al-Baker was in Dubai for a travel expo.
State-owned Qatar Airways competes for long-haul international passengers with Dubai-based Emirates airline and Etihad.
"Qatar Airways is not interested in an acquisition at this time," al-Baker said before Etihad's deal was announced. "We do not just acquire loss-making entities because we are going to get them at a very good price and take advantage of their difficulties."
He said Qatar Airways would be interested only in well-run, promising airlines that are unable to find needed cash. Qatar Airways already has stake in the Luxembourg-based freight carrier Cargolux.
"We are not in this business of restructuring. We are in the business of making money," he said.
Associated Press writer Shawn Pogatchnik contributed from Dublin.