Irish airline Aer Lingus said Etihad Airways has acquired a 2.987 percent stake, as Abu Dhabi's flagship carrier makes further inroads into the European market.
Aer Lingus said on Tuesday it and Etihad have been in talks about a commercial partnership which have focused on code-share opportunities until now, and are being extended to include cost savings proposals through joint-procurement.
This follows months of speculation with Etihad making no secret of its interest in Aer Lingus.
The head of Etihad, James Hogan, told an Irish newspaper in February that the group was interested in talks with the Irish government over its 25 percent stake in Aer Lingus.
In December, Etihad raised its stake in Air Berlin to nearly 30 percent from just under 3 percent, paying approximately 73 million euros ($97m) and lending the carrier $255m.
In return, Etihad received a code-share agreement giving it access to Air Berlin's dense European short-haul route network and to the German capital ahead of Emirates, one of the fastest-growing carriers in the world, which has been lobbying for years to get into Berlin.
The move by eight-year-old Etihad, one of the United Arab Emirates' flag carriers and owned by the Abu Dhabi government, is an attempt to gain scale quickly as it bids to catch up to rivals such as Dubai government-owned Emirates and Qatar Airways.
Aer Lingus said that Etihad had stated it does not intend to increase its stake further, pending the outcome of discussions on a commercial tie-up.