Qantas could be forced out of business by Ethihad's Virgin takeover

ANI – Wed 6 Jun, 2012 2:46 PM IST

Sydney, June 6 (ANI): Australia's flagship carrier Qantas Airways could be forced out of business if Middle Eastern airline Etihad takes over Virgin Australia, experts fear.

Etihad, owned by Abu Dhabi's royal family, will be buying a four percent stake in Virgin Australia's domestic and international businesses, news.comau reports.

Aviation experts said such a move could threaten the future of Qantas by allowing a foreign-controlled Virgin Airlines to dominate the domestic market with predatory pricing.

However, Foreign Investment Review Board sources revealed the airline has also flagged taking a further 'direct investment,' signalling intentions to take control of the Australian market.

Experts said Qantas was restricted from having foreign control through legislation, and would be left to compete on an uneven playing field as Etihad was funded by a wealthy royal family and paid no tax at home.

Yesterday, Etihad head James Hogan said the company wanted to increase its stake in Virgin to 10 percent. (ANI)

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