Etihad boss says open to more equity stake deals

James Hogan says currently in talks for deals with Jet Airways, Air Serbia and Virgin Australia

James Hogan, president and CEO of Etihad.

James Hogan, president and CEO of Etihad.

The boss of Etihad Airways on Tuesday hinted that more investments will be made in other airlines as it continues to increase its global reach.

James Hogan, president and CEO of the national carrier of the UAE, said the carrier was currently in talks to complete three major deals, with more possible in the future.

Speaking at the FVW Kongress in Cologne, Germany, Hogan said the Etihad was in talks for the acquisition of 24 percent of India’s Jet Airways, a 49 percent stake and management contract in Air Serbia, and increasing equity in Virgin Australia from 10 percent to a target of 19.9 percent. 

“Global reach is beyond the capacity of any single airline. Progress must come through partnership,” said 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 percent stake in airberlin, followed by a 40 percent 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 percent stake in Ireland’s Aer Lingus, this year’s Air Serbia deal and, subject to final approval, the Jet Airways investment.

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,” Hogan said, adding: “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.”

“Our equity alliance is a new business model for the airline industry,” Hogan said.

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Posted by: Mohamed

I think Etihad will fail oneday . They Can't beat Emirates

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