Abu Dhabi-based Etihad Airways has received government and regulatory approval to become a shareholder in Serbia’s national carrier Air Serbia.

Etihad Airways signed an agreement with the government of Serbia in August 2013 to establish a strategic partnership between the two carriers involving a $200m investment plan. Etihad’s initial $40m loan facility will now be converted into equity.

“I am pleased to confirm Etihad Airways is now the shareholder of 49 per cent of Air Serbia,” says Etihad Airways president and CEO James Hogan.

Since the agreement in August, the Serbian carrier was rebranded from its former name Jat Airways and operates direct flights between Belgrade and Abu Dhabi four times a week.

Etihad is also in discussions with Air Berlin to raise its shareholding to 49.9 per cent and delist the German carrier, reported local WirtschaftsWoche magazine on 22 March. Etihad has close to a 30 per cent stake in Air Berlin.

The Air Berlin decision could bolster the possibility of Etihad’s acquisition of 40 per cent of Italian carrier Alitalia. A merger of the German and Italian carriers could reduce the financial burden of Alitalia’s $1.1bn debt.

Etihad Airways has four other equity partnerships. These include Air Seychelles, Virgin Australia, India’s Jet Airways and Ireland’s Aer Lingus. Equity investment was one of the main attributed factors to Etihad’s a 48 per cent total net profit increase in 2013.

On 4 March Etihad formed the Etihad Aviation Group, which will allow it to grow from a single airline into a wider global aviation group.