Virgin Australia has struck a new code-sharing agreement with Etihad Airways-backed Alitalia,??? at a time when some analysts doubt whether the Abu Dhabi-based carrier will remain a shareholder in the Australian airline over the longer term. 
The new deal will cover Italian carrier Alitalia's daily flights from Abu Dhabi to Rome and Milan, destinations to which Virgin already offers code-shares through Etihad and Singapore Airlines. A reciprocal frequent flyer arrangement is expected to follow soon. 
Until   March, Alitalia had a code-share and frequent flyer agreement with Virgin rival Qantas, a legacy from before Etihad bought a 49 per cent stake in the financially troubled Italian carrier, as part of a ???1.76 billion ($2.66 billion) deal in 2014.
In   December, Australian Cramer Ball, the former head of Etihad affiliate Jet Airways, was appointed the new chief executive of Alitalia.
Etihad owns a 25.1 per cent stake in Virgin Australia. Air New Zealand has placed its 25.9 per cent stake in the Australian carrier for sale, in a move that could result in significant shifts on the share register.
However, aviation experts view Singapore Airlines as a more likely buyer of the Air New Zealand stake than Etihad.
CAPA Centre for Aviation said Etihad appeared to be pulling back on its expansion plans compared to Middle Eastern rivals Emirates and Qatar Airways.
Etihad is expected to boost capacity 9 per cent in 2016, the second-slowest rate in its decade-long history, while Qatar's capacity is forecast to increase 23 per cent and Emirates 10 per cent from a far larger base.
"Etihad wants to bed down growth, replace partner aircraft it has been using and improve equity partner financials amidst the Abu Dhabi government reducing spending, as observed elsewhere in the Middle East following the sharp decrease in oil price," CAPA said.
The Sydney-based global aviation consultancy said against that backdrop, Etihad was unlikely to pursue the Air New Zealand stake in Virgin.
"Australia is a larger market for Singapore Airlines than Etihad, and Singapore Airlines has ample cash reserves," CAPA said. "As seen with Singapore Airlines' purchase of Tigerair [Singapore] well above its market value, the group is not opposed to paying a premium to secure its strategic intent."
Etihad has not publicly expressed any desire to sell its stake in Virgin, but analysts believe that could be an outcome if Singapore Airlines gained majority control through the purchase of the Air New Zealand stake.
Air New Zealand has a joint venture with Singapore Airlines, as well as sharing membership in Star Alliance, but a more distant relationship with Etihad.
Under a Singapore Airlines purchase of Virgin it is possible all European traffic could eventually be directed via Singapore, rather than being split with Etihad's Abu Dhabi hub.