ETW Staff – Mumbai
Etihad Airways, has foreshadowed more investments in other airlines, as it continues to increase its global presence through a mix of organic growth and strategic partnerships.
Speaking today at the FVW Kongress in Cologne, Germany, James Hogan, president and chief executive officer, Etihad Airways, said,“The airline was currently engaged in three major transactions: the acquisition of 24 per cent of India’s Jet Airways, a 49 per cent stake and management contract in Air Serbia, and increasing equity in Virgin Australia from 10 per cent to a target of 19.9 per cent.”
“Global reach is beyond the capacity of any single airline. Progress must come through partnership. 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,” he added.
Etihad Airways launched its equity investment strategy in 2011 with the purchase of a 29 per cent stake in Air Berlin, followed by a 40 per cent 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 per cent stake in Ireland’s Aer Lingus, this year’s Air Serbia deal and, subject to final approval, the Jet Airways investment.
Hogan said,“Equity investments deliver synergy benefits which cannot be achieved through legacy airline alliances. 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.”
Plans are being implemented to leverage a range of other synergies. Hogan said. “Our equity alliance is a new business model for the airline industry.”
