Etihad puts Perth on hold for two years

MIDDLE EAST airline Etihad has flagged that its focus will be on bedding down its operations on routes to Australia over the next two years before it looks to expand services to Perth.

Etihad also reiterated that it intends to increase its stake in Virgin Australia beyond its existing holding of 9 per cent, but highlighted that it would have to be "at the right time".

The chief executive, James Hogan, said he was bullish about the airline's prospects on routes to Australia, although it would be two years before it was likely to begin services to Perth from its base in Abu Dhabi.

"Australia is doing well for us . . . [and] we will continue to build on what we have," he said.

Etihad's next big order of new planes is not due to begin to arrive until the end of 2014.

The airline operates 25 flights a week to Australia, including twice daily to Sydney and daily to Melbourne. It also code-shares on three weekly Virgin Australia flights to Abu Dhabi.

Etihad highlighted the benefits from its alliances with airlines including Virgin and Air Berlin, as it reported a net profit of $US42 million ($40 million) in 2012, up from $14 million in 2011.

The airline has to reapply to Australia's Foreign Investment Review Board each time it wants to raise its stake in Virgin by another 5 percentage points. To date, Etihad has not reapplied for an increase in its holdings.

Singapore Airlines also has a 10 per cent stake in Virgin while Air New Zealand has a 20 per cent holding.