Etihad Airways is pursuing a stake of up to 10% in Virgin Australia, taking advantage of a recent restructuring of the Australian carrier that is aimed at allowing more overseas investment.

Etihad confirmed that it has acquired a 3.96% share of Virgin Australia’s domestic entity on the stock market in recent weeks, and CEO James Hogan says his intention is to take the stake up to 10%. The value was not released.

This move has been widely expected ever since Virgin Australia split its international operation into a separate unlisted company in February. This effectively removed the 49% foreign ownership restriction on the main domestic company, since the limit applied only to airlines with international flights.

When the split was announced, Virgin Australia had almost reached the foreign ownership ceiling due to large shareholdings by U.K.-based Virgin Group and Air New Zealand. While Virgin Australia executives said they were not in talks with any investors, Etihad was seen as the most likely candidate. Etihad has a close alliance with the Australian carrier on many key long-haul routes.

Etihad says its equity investment in Virgin Australia “significantly strengthens” the airlines’ existing strategic partnership and will “enrich the commercial benefits which the alliance already provides for both airlines.” Last month, Etihad leased a Virgin Australia Boeing 777-200ER for use on the Abu Dhabi-Kuala Lumpur route.

Virgin Australia is only the latest in a series of airlines that Etihad has targeted for investment. Its largest stake to date is a 29.21% shareholding in Air Berlin, which it completed late last year. It added a 2.99% stake in Aer Lingus and also controls 40% of Air Seychelles. Hogan has said he is open to investing in additional airlines. The partnerships are intended to help Etihad expand its global footprint more quickly than it could through its own growth.

Etihad’s strategy differs from that of its rival Emirates, which has few bilateral agreements or shareholdings with other airlines.