Embattled Gulf carrier Etihad has dropped a bundle of cash on yet another failed airline investment. The administrators of Virgin Australia have today confirmed that shareholders of the airline will see a zero return on their investment. Etihad held a 21% shareholding in Virgin Australia before it collapsed in April. At the time of the collapse, Etihad's shareholding was worth around US$109 million.

But Etihad can forget about seeing any of that back. Virgin Australia's administrators are proposing a deed of company arrangement that would see unsecured creditors receive between nine and thirteen cents back in the dollar. Because the creditors cannot be paid out in full, the shareholders will get nothing back.

Etihad isn't the only big-name airline that's lost money here. Singapore Airlines, HNA, and Nashan Group all owned about 20% of the airline. They have all have lost their investments. Richard Branson's Virgin Group had a 10% stake. So that's US$52 million Sir Richard won't be seeing back.

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Etihad's sorry track record in airline investments

But it's Abu Dhabi-based Etihad Airways that has the sorriest track record in airline investments. The airline had long eschewed joining a traditional airline alliance in favor of creating individual partnerships with specific airlines - a kind of bespoke alliance.

That strategy involved Etihad selecting particular airlines across different geographic zones; Alitatia in southern Europe, AirBerlin in northern Europe, Jet Airways in India, and Virgin Australia in Oceania to cite a few.

At the time, it was a departure from convention in the airline industry. In fairness, many pundits thought there was merit in Etihad's strategy. However, Etihad went off the rails by investing in these airlines and then often choosing financially shaky airlines to invest in. Across the board, these investments have been disastrous for Etihad. Now, true to form, Etihad's investment in Virgin Australia is officially written off.

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The Virgin Australia write-off continues a series of ill-fated airline investments by Etihad Airways. Photo: Tom Boon - Simple Flying

How much money has Etihad lost on Virgin Australia?

Getting a handle on how much Etihad has sunk into Virgin Australia is a tricky business. Etihad bought an initial 10% shareholding in Virgin Australia in the middle of 2012, then worth around US$72 million. Within two and a half years, Etihad's stake in Virgin Australia had increased to 24.2%. It is estimated Etihad has sunk US$176 million into Virgin Australia over the years.

They had since sold down their stake to 21%, in the process recouping some funds. But Virgin Australia's share price also tanked over time, from highs of around 50 cents to just eight cents. At the time of Virgin Australia's collapse, Etihad's shareholding was valued at about US$109 million.

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Virgin Australia is still in the skies, but Etihad is well and truly out of pocket. Photo: Getty Images

Virgin Australia's new owners, Bain Capital, are committing over US$2.5 billion to the airline. That money includes paying employee entitlements in full, honoring travel credits and forward bookings, assuming a significant portion of secured debts and aircraft lease liabilities, and a limited return to unsecured creditors. There's nothing left on the table for the airline's former owners.

With many unsecured creditors receiving a miserly return, there won't be any funds forthcoming to Etihad in the future either.

So that's another Etihad airline investment gone belly-up. It comes at a time when Etihad can ill-afford it. Etihad's airline investments had already provided a masterclass for airline CEOs in what not to do. Today's announcement out of Sydney doubles down on that.