Abu Dhabi's Etihad Airways has received approval from the Australian government to increase its stake in Virgin Australia to 19.9%
An Etihad spokesman confirms that Australia's Foreign Investment Review Board (FIRB) has cleared it to increase its stake, up from its current holding of 10%.
"Etihad Airways continues to enjoy a very strong relationship with Virgin Australia which has been built up over several years and continues to deliver significant benefits to both airlines," the spokesman adds.
Etihad has not indicated that it is in any talks with Virgin to increase its stake, and so may buy more shares on the open market, or possibly from Sir Richard Branson's Virgin Group.
In May, Branson indicated that Virgin could sell down its remaining 13% stake in Virgin Australia as it was no longer important to the company.
His comments came after Singapore Airlines agreed in April to buy a 10% stake from Virgin Group in the Australian carrier for A$123 million ($115 million), taking its holding to 19.9%. Stock exchange records show that Virgin concluded the share sale on 25 June.
Air New Zealand is the largest shareholder in Virgin Australia with a 23% stake, and is awaiting the outcome of an FIRB application that could allow it to acquire a further 3% stake.