Etihad Airways has become one of the fastest growing airlines in aviation history. In an exclusive interview, President and CEO James Hogan reveals how the airline is funded, and hits back at the growing campaign of smear and innuendo
The setting couldn’t be more spectacular. It is 7pm on June 10th and Etihad’s president and CEO James Hogan is checking his tie before walking onto a specially crafted stage in the gardens of the Beverly House. Situated three blocks from Sunset Boulevard, this six-acre site was once home to William Randolph Hearst, a honeymoon spot for John and Jackie Kennedy, and even a scene from The Godfather.
Hogan — here to officially launch the first Etihad Airways flight from Abu Dhabi to Los Angeles, has a tough gig: speaking after Danni Minogue and before Harry Connick Jr. The crowd wants a party, but Hogan needs to talk strategy.
Unfazed, he struts to the podium and begins. This is a company that has come from nowhere to become one of the fastest-growing airlines in aviation history, operating more than 220 flights a day and is on track to carry 14 million passengers this year. Last year its revenues reached $6.1bn, up 27 percent. And it is profitable. Little wonder it has options, orders and purchase rights for up to 300 more planes, to add to its fleet of 101 aircraft.
The audience, at first unsure, are quickly dazzled by the numbers. Buzz Aldrin, also in the crowd, looks startled. Twelve men have walked on the moon, but only one man can claim to run “The World’s Leading Airline” for five years on the trot. Hogan nails the speech, nails the crowd and nails Los Angeles. Harry can wait.
“I’m used to pressure,” he tells me as he comes off stage.
He can say that again. Two weeks later we meet again at Etihad’s Abu Dhabi headquarters. Hogan, as always, has a lot on his plate. The leaking of confidential four-year-old documents has raised questions over just how Etihad is financed, reviving claims that the airline is completely subsidised by the Abu Dhabi government.
There are question marks over his strategy of taking equity investments in largely underperforming carriers. Exactly how the airline has managed to turn in a profit for the past three years is under scrutiny. Its public service obligations, its Emiratisation programme (and who pays for it) and its sponsorships are also in the spotlight. The critics (mostly the European carriers led by Lufthansa) are crying foul, wondering whatever happened to the level playing field.
It takes 25,000 Guest Miles to go from Coral Economy to Pearl Business, but just a little splashing of smear and innuendo can upgrade fiction to fact. The Etihad story is a good story, his rivals will concede, but not before suggesting it may be too good to be true.
Hogan, for his part, has remained silent. Until now. “What we are seeing from some of our competitors is a campaign which I believe is to block greater choice for the consumer. And if you block Etihad, you block choice,” he says.
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