Abu Dhabi's flagship carrier, Etihad Airways, in support of its expansion plans, announced on Tuesday it has acquired a 4 per cent controlling stake in Virgin Australia Holdings.

The purchase was acquired through the stock market, "built over recent weeks, through purchases on the open market," Etihad Airways said in a statement which Virgin Australia Holdings posted on the Australian Securities Exchange on the same announcement date.

The UAE airline company, however, did not detail the exact amount of its purchase. It did not also outline possible future plans of increasing the number of its controlling stakes in the Australian airline enterprise.

"Etihad Airways believes that this equity investment in Virgin Australia's domestic operations significantly strengthens the 10-year strategic partnership forged by the two carriers in August 2010," the statement said.

The sellout forms part of Virgin Australia Holdings' plans of splitting its international and domestic operations, earlier saying it is agreeable to the idea of overseas airline companies taking larger stakes in its domestic operations.

Etihad Airways, meanwhile, has been actively purchasing shares, also in a number of overseas airline companies, to gear into competition with other airliners, such as Dubai government-owned Emirates and Qatar Airways.

It has recently bought a 3 per cent stake in Irish airline Aer Lingus, while in December it increased to nearly 30 per cent from a previous tiny 3 per cent its stake in Air Berlin.

Etihad Airways entered into a 10-year alliance with Virgin Australia in August 2010. It began servicing Australia in 2007 and together, they operate 24 flights a week between Abu Dhabi and Australia.