Virgin Australia's foreign shareholders Singapore Airlines, Etihad Airways and Air New Zealand will increase their stakes in Australia's second-biggest carrier. This after only a measly 25.3 per cent of retail shareholders showed interest in Virgin's $350 million capital raising efforts.

A Qantas Airlines Boeing 737 plane sits next to a Virgin Australia Boeing 737 plane at the Port Hedland airport in the Pilbara region of western Australia December 3, 2013. Ratings agency Standard & Poor's has cut Qantas Airways Ltd's credit ratings to junk grade with a negative outlook after the Australian carrier shocked investors on December 5, 2013 with a loss warning. S&P said on December 6 it cut its ratings on Qantas by a notch to BB+/B. The agency said a structural shift in the domestic competitive landscape had weakened Qantas' business risk profile. Picture taken December 3, 2013. REUTERS/David Gray

The three big airlines previously owned a 63 per cent stake in Virgin. With the low turnout from retail shareholders, their combined ownership in the troubled Australian airline rose to 67 per cent, broken down as follows:

  • Air NZ from 23 per cent to 24.5 per cent
  • Singapore Airlines from 19.9 per cent to 21.2 per cent
  • Etihad Airways from 20 per cent to 21.2 per cent

Richard Branson, Virgin founder, controls 10 per cent.

Qantas has cried foul over the latest development.

"This highlights what we have been saying for weeks about the uneven playing field," The Australian quoted a Qantas spokesman.

"Virgin Australia is now almost 80 per cent foreign-owned after receiving more than $300m from state-owned enterprises, but it has all of the international traffic rights reserved for majority Australian-owned carriers."

Qantas is restricted to foreign airline investment of only 35 per cent. Total international ownership is capped at 49 per cent only.

Of Virgin Australia's three foreign investors, only Air NZ has Foreign Investment Review Board approval for its stake. Singapore and Etihad still need to seek prior clearance to take control of the shares that will expand their stakes.

Virgin conducted the raising at 38¢ a share, compared to a closing price of 37¢ on Wednesday.

The shares issued in the retail offering will be issued on December 17. It will start trading on December 18.