Virgin Australia rejects Qantas’ lobbying move

VIRGIN Australia’s boss has joined its new financial backers, Etihad Airways, in attacking Qantas over its campaign against the Middle Eastern airline’s investment.

Etihad won Australian Foreign Investment Review Board approval on Thursday to increase its stake in Virgin Australia, the nation’s secondlargest carrier, from just under 5 per cent to 10 per cent.

Virgin Australia chief executive John Borghetti ridiculed suggestions the investment would threaten Qantas’ existence, after the national carrier warned the federal government that state-owned Etihad could fund a flooding of Australia’s domestic capacity.

‘‘I think people really are jumping at shadows and some people need to take a cold shower and just relax,’’ Mr Borghetti said.

‘‘Do they think that all of a sudden that a 10 per cent shareholding is going to somehow ... bankroll the flooding of capacity in this country?

‘‘I am really intrigued: we’ve got a New Zealand airline that owns 19 per cent of us, we’ve got Richard Branson or his company owning 26 per cent of us, so if someone was going to put a lot of money into us and flood the market I would think it would be these guys with bigger shareholdings. It’s just not logical.’’

The comments come after Etihad chief executive James Hogan said Qantas’ lobbying against the investment was out of step with mainstream Australia.

Qantas is restricted from having foreign ownership above 49 per cent.

Its international operations are currently posting losses and have suffered from industrial action, while Virgin has benefited and increased its profits.