SYDNEY May 22 Abu Dhabi-based Etihad Airways
had access to a secret, interest-free $3 billion loan from the
Abu Dhabi ruling family, contrary to long-standing denials, the
Australian Financial Review reported on Thursday.
Citing what it said were leaked documents prepared for
prospective financiers in 2011, the newspaper said the loan for
the state carrier required no repayments until 2027.
In a slide headed "Equity and Shareholders Loan," the
document states: "The shareholder has provided significant loan
facility for aircraft deposits and working capital -
subordinated, interest free and no repayments until 2027."
(To view documents, click link.reuters.com/ruk59v)
Etihad, which has been looking at a possible investment in
loss-making Italian airline Alitalia, declined to comment on the
Etihad is already a major shareholder in Virgin Australia
Holdings, which has been engaged in a brutal price and
capacity war with flag carrier Qantas Airways Ltd.
Qantas has long complained that Etihad and by extension
Virgin, have benefited from subsidies from the Gulf state,
something Etihad management has repeatedly denied.
Qantas has been lobbying for government support and changes
to the law that limits its foreign ownership.
The newspaper said industry sources had provided the
document, which had circulated among the management ranks of
Etihad's competitors, such as Qantas and Emirates.
The Australian and International Pilots Association said the
claims of support from the royal family needed to be checked and
action taken to level the playing field.
"Etihad's contribution to Virgin's A$350 million ($322.60
million) equity issue last year was critical to the issue's
success. We now know this contribution was backed by the
interest-free generosity of the Abu Dhabi royal family," said
AIPA President Nathan Safe.
"Such an obviously unfair distortion of competition would
never be allowed in any other sector of the Australian economy
and it should not be allowed to continue in aviation."
Virgin Australia did not immediately respond to requests for
($1 = 1.0850 Australian dollars)
(Reporting by Lincoln Feast; Editing by Matt Driskill)