24 Sep 2013 07:30
Etihad Airways, the national carrier of the United Arab Emirates, has foreshadowed more investments in other airlines, as it continues to increase its global presence through a mix of organic growth and strategic partnerships.
Speaking today at the FVW Kongress in
Cologne, Germany, the President and Chief Executive Officer of Etihad Airways,
James Hogan, said the airline was currently engaged in three major transactions
– the acquisition of 24 per cent of India’s Jet Airways, a 49 per cent stake
and management contract in Air Serbia, and increasing equity in Virgin Australia
from 10 per cent to a target of 19.9 per cent.
“Global reach is beyond the capacity of any
single airline. Progress must come through partnership,” said Mr Hogan. “The
investments we are making are delivering significant benefits not only to the
airlines but to our passengers and freight customers. We will consider more
strategic partnerships if they add value.”
Etihad Airways launched its equity investment
strategy in 2011 with the purchase of a 29 per cent stake in airberlin,
followed by a 40 per cent investment in Air Seychelles, which included a five
year management contract. This was followed last year by the investment in
Virgin Australia and a three per cent stake in Ireland’s Aer Lingus, this
year’s Air Serbia deal and, subject to final approval, the Jet Airways
Together, Etihad Airways and these six
airlines serve more than 340 destinations with a fleet of 511 aircraft. In
2012, they carried a combined total of more than 91 million passengers – comparable
to large airline partnerships in Europe and Asia.
“Equity investments deliver synergy benefits
which cannot be achieved through legacy airline alliances,” Mr Hogan said.
“Legacy alliances are focused largely on network and revenue benefits. Our equity
alliance delivers much broader benefits for all of the partners including
opportunities to reduce costs through resource sharing and joint procurement.”
Mr Hogan said
the foundation investment in airberlin had delivered significant gains to both
carriers, with more than 260,000 passengers flying on their combined networks
in the first half of 2013 - more than four times higher than the first half of
Etihad Airways now codeshares on 61 airberlin
routes, while airberlin codeshares on 31 routes of Etihad Airways. Together,
the airlines operate 42 flights each week between Abu Dhabi and four German
cities – Frankfurt and Dusseldorf (both airlines), Munich (Etihad Airways), and
In addition, plans are being implemented to
leverage a range of other synergies.
The Etihad Guest and airberlin Topbonus loyalty
programs have been integrated, enabling guests on both carriers to earn and
redeem mileage points on either airline.
Reservations and ticketing facilities for airberlinwill
be established in Etihad Airways’ new European headquarters in Berlin.
And both airlines have agreed to identical
interiors, engines and a joint implementation program for their new Boeing
787-9 aircraft, the first of which will enter service in 2014.
“Our equity alliance is a new business model
for the airline industry,” Mr Hogan said.