October 8, 2014
Is Etihad fed up with playing ‘little brother’ to Emirates and Qatar Airways?
With 2013 seeing a massive jump of 48%in the profits of Etihad Airways, it would seem that they are hungry for success. In addition to investing heavily in acquiring a 49% stake in Alitalia forUS$2.35bn this year to gain a foothold in key European markets, Etihad has invested over US$1bn on 7 other carriers dotted around the world since 2011. Etihad Airways is wholly owned by the Government of Abu Dhabi, and this week it has announced the creation of a fourth major global airlines alliance, Etihad Airways Alliance. This alliance will include five other airlines Etihad has a share in, including airberlin, which is currently a member of Oneworld, Air Serbia, Air Seychelles, India’s Jet Airways and Darwin Airline.
With a commercial holding in each of these airlines it makes sound economic sense to try and use economies of scale and this is doubtless of great benefit to Etihad Airways itself. This alliance will synchronize schedules and frequent flyer benefits will be offered in a similar manner to the three other major alliances. As Etihad president and CEO James Hogan put it: “The Etihad Airways Partners logo is a seal of excellence and global cooperation. It will be displayed on aircraft and on branded materials by a group of airlines working together to connect travelers around the world, and increasingly to harmonize standards in the air and on the ground.
“The potential for network alignment to maximize flight connectivity for passengers, together with a shared passion for superior service, are central to the ethos of the Etihad Airways Partner concept,” he added. With Qatar Airways belonging to the Oneworld Alliance and Emirates preferring to remain wholly independent, one senses that Etihad is playing chess and looking at ways to cleverly manoeuver itself into a more powerful situation with reference to its neighboring airlines, as well as globally. It would be no surprise to see the airline make further substantial investments in major airlines, and have each and every one eventually join the Etihad Airways Alliance. After all, what better reason for an alliance than holding a substantial share in each airline included?