Etihad Airways will acquire a 40 percent stake in Air Seychelles, its second airline acquisition in the last five weeks as the rapidly growing Abu Dhabi-based carrier embarks on an ambitious expansion plan.
Etihad and the Seychelles government will each invest USD$20 million in the state-owned airline, Etihad said on Wednesday. Etihad will also provide a USD$25 million loan to help Air Seychelles meet working capital requirements and support network development.
"The investment in the national carrier of Seychelles is a natural next step towards growing our operations in the increasingly important leisure markets of the Indian Ocean and Africa," Etihad's chief executive James Hogan said in a statement.
The agreement also includes a five-year management contract for Etihad Airways to encourage Air Seychelles' long-term growth, the statement said.
Last month, state-owned Etihad acquired a stake of around 30 percent in Germany's Air Berlin.
Middle East carriers such as Etihad, Qatar Airways and Dubai-based Emirates have been aggressively expanding route networks, provoking fears that Gulf-based superjumbos would draw traffic from European carriers' hubs.
Qatar Airways recently acquired a 35 percent stake in all-freight carrier Cargolux, while the Air Berlin stake purchase was the first time a Gulf carrier has bought an equity stake in a European passenger airline.
Etihad owns a fleet of 64 Airbus and Boeing aircraft with another 100 aircraft on order.
Source: Reuters
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