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Wed 22 Jan 2014 02:36 PM

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Etihad's Hogan to join Virgin Australia board

UAE flag carrier chief James Hogan confirms he’ll personally take up a seat on board of Virgin Australia

Etihad's Hogan to join Virgin Australia board
Etihad Airways chief executive James Hogan.

Etihad Airways chief executive James Hogan has confirmed he will personally take up a seat on the board of Virgin Australia, the airline in which the UAE flag carrier has a 19.9 percent stake.

Hogan, an Australian, is the first boss of three airlines offered a board seat to reveal he would personally take up the position.

Virgin offered Etihad and its other significant shareholders, Air New Zealand and Singapore Airlines, a board seat each after they injected $350m into the Australian carrier as part of a capital raising exercise late last year.

The Australian Financial Review, which broke the news, said the other airlines would now likely follow Hogan’s lead and nominate their CEOs.

Hogan said he chose to take up the role personally, which will include attending several board meetings in Australia each year, because he believed he could help improve the airline.

He would join the board after Virgin chairman Neil Chatfield had finished putting in place the rules of engagement and protocols for shareholder representatives.

“I will sit on the board,” Hogan told the AFR. “I am an Australian, I know the market; I’ve been in aviation since 1975, maybe I can add some value.” 

During the interview, Hogan also rejected an accusation by the CEO of rival Australian airline Qantas, which is partnered with Dubai’s Emirates, that Etihad, Air New Zealand and Singapore Airlines were plotting a “virtual takeover” of Virgin Australia.

In November, Alan Joyce said the airlines’ increased investment in Virgin would destabilise the country’s domestic aviation industry, local tourism and jobs, and was not proper commercial behaviour.

Joyce also formally complained to the Australian federal and NSW governments, calling for regulatory changes to remove a cap on foreign ownership of the former public airline, which does not apply to Virgin.

But Hogan played down the concerns, saying “we have all got our challenges in life”.

He denied Etihad was employing “predatory behaviour”.

“We happen to be owned by the state but we have a commercial mandate and we are structured accordingly,” Hogan said.

“If I don’t deliver the financial requirements of the business they will replace me. That is the environment all Abu Dhabi companies operate in.”

Etihad has a strategic stake in numerous airlines, including Air Berlin, Air Seychelles, Aer Lingus and Jet Airways.  It also is awaiting regulatory approval to acquire 49 percent of Air Serbia and 33.3 per cent of Darwin Airline.

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