Abu Dhabi's Etihad buys stake in Virgin Australia

Abu Dhabi's fast-growing Etihad Airways said Tuesday it has bought up nearly 4 percent of Virgin Australia, pushing ahead with a strategy of acquiring minority stakes in overseas carriers.

The deal marks the fourth publicly disclosed stake Etihad has taken in another carrier since December. The purchases are a way for Etihad to gain an edge over larger Gulf rivals Emirates and Qatar Airways.

"We're building a strong business model. And part of that business model is partnerships," Etihad CEO James Hogan told The Associated Press. "We do have two large competitors on our doorstep. And we will never match their aircraft order book."

Etihad spent $35.6 million on the 3.96 percent stake, and aims to acquire as much as 10 percent of the Australian carrier, Hogan said. He declined to say when Etihad first began amassing the stake, which is bought on the open market.

Virgin Australia confirmed the deal in a brief statement to the Australian Securities Exchange.

The companies have an existing partnership signed in 2010 designed to boost commercial ties. That deal allowed the carriers to link up their frequent flyer programs and grant airport lounge access to each other's passengers.