Etihad seals codeshare deal Air France-KLM

Deal marks the first phase of a larger strategic partnership, says CEO James Hogan
Etihad seals codeshare deal Air France-KLM
By Claire Valdini
Mon 08 Oct 2012 11:07 AM

Abu Dhabi-based Etihad Airways has signed a codeshare agreement with Air France-KLM as part of the first phase of a larger strategic partnership, the airline said on Monday.

The agreement, which will begin on October 28, will see both airlines offer joint codes on destinations in Europe, the Middle East, Asia and Australia. 

“Partnerships are delivering a major source of our revenue growth, by extending our network reach and putting our brand directly in front of millions of new customers,” James Hogan, president and CEO of Etihad Airways, said in a statement.

“This year to date, they are providing 18 percent of our revenues and will be a major contributor to our sustained profitability growth this year and into the future,” he added.

The deal marks a thawing of relations between European carriers and Gulf airlines, which have been criticised for their aggressive expansion.

“Like many European airlines that have rounded on GCC carriers Air France-KLM has realised that co-operating with the likes of Etihad is far better than competing head to head,” said Saj Ahmad, analyst at StrategicAero

“Air France-KLM is losing money and passengers and is strangulated by an outmoded business model. Linking up with Etihad gives them better access to the GCC and allows them to partner up on routes where demand is erratic and yields are weaker,” he added.

Airberlin, the German airline in which Etihad owns a 29.21 percent stake, also announced a new codeshare agreement with Air France.

The Gulf carrier, which competes with regional rivals Emirates and Qatar Airways, on Sunday reported a 19 percent increase in third quarter profits to $1.3bn. Abu Dhabi’s flag carrier attributed the rise to a 51 percent increase in income from its codeshare and airline partners.

The airline added it is confident to achieving full-year profitability for the second year running.

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