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Fri 4 Jul 2014 03:45 PM

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Gulf carriers are “vigorous competitors with each other” says Etihad boss

“All Gulf carriers are not the same... [and] follow different strategies,” CEO James Hogan said in a speech.

Gulf carriers are “vigorous competitors with each other” says Etihad boss
President and CEO of Abu Dhabi’s Etihad Airways James Hogan

Gulf carriers are “vigorous competitors with each other” and follow different strategies in order to achieve the fast-paced growth rates enjoyed by the main players in the region, the president and CEO of Abu Dhabi’s Etihad Airways said in a speech this week in Vienna.

“All Gulf carriers are not the same,” Hogan said in a speech at a European Union conference on air transport competitiveness. “We are different sizes, have different hubs and follow different strategies. We are actually vigorous competitors with each other.”

Industry figures from the International Air Transport Association (IATA) showed Middle East carriers posted 13.2 percent year-on-year growth in passenger demand in May, making the region the strongest performer in the world. However, the three main players in the region – Dubai’s Emirates Airline, Abu Dhabi’s Etihad Airways and Doha’s Qatar Airways – have used different strategies in order to maintain these exceptional growth levels.

In a bid to boost its global presence, Qatar Airways joined the Oneworld aviation alliance in October 2013, while Emirates has pursued a solo approach to developing its global network over the past three decades, bar a strategic 10-year partnership signed with Australian carrier Qantas in 2012.

However, Abu Dhabi-based Etihad, which celebrated its ten year anniversary last year, has quickly expanded its network through a series of codesharing agreements and minority stakes in a network of international partner airlines. From its Abu Dhabi base, Etihad flies to 103 passenger and cargo destinations in the Middle East, Africa, Europe, Asia, Australia and the Americas.

“We have a different business model to suit our different requirements. To grow, we need scale. We cannot match the size of long-established competitors, including other Gulf carriers, so we have developed a strategy of growth through partnership,” Hogan said. “Our strategy is pro-competitive. We work with all partners for mutual gain, and within competition and ownership rules. Collaborative growth delivers sustainable businesses, and more choice, convenience, consistency, reliability and stability for our customers.”

Etihad currently holds equity investments in Air Berlin, Air Seychelles, Virgin Australia, Ireland's Aer Lingus, Air Serbia and India's Jet Airways, is in the process of formalising its equity investment in Swiss-based Etihad Regional – operated by Switzerland's Darwin Airline – and is in the final stages to acquire a 49 percent stake in Italy’s Alitalia.

Addressing his airline’s investment strategy in Europe, Hogan said “Gulf carriers are not the cause of Europe’s aviation challenges” and “external investment is not a threat... It is an opportunity to strengthen airlines, and to support employment and economic growth.”

The Australian airline boss said the European industry was already facing serious problems decades before Etihad Airways was established in 2003 and its strategy of buying minority stakes had strengthened partner airlines, preserved and created jobs, helped maintain air services and delivered benefits to consumers.

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