Etihad Airways CEO James Hogan hints at more investment worldwide

Written by PTI | Dubai | Updated: Sep 26 2013, 20:16pm hrs
Etihad AirwaysBollywood actress Katrina Kaif during a news conference in Mumbai. (AP)
The UAE-based Etihad Airways has hinted at investing in other airlines, as it seeks to increase its global presence through acquisitions and strategic partnerships.

Speaking at the FVW Kongress in Cologne, Germany, the President and Chief Executive Officer of the airline, James Hogan, 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," Hogan said.

Etihad Airways launched its equity investment strategy in 2011 with the purchase of a 29 per cent stake in airberlin, 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 the Jet Airways investment, subject to final approval, will further the airline's global reach.

Etihad Airways, the national airline of the United Arab Emirates, had recently announced Katrina Kaif as the airlines new brand ambassador.

Etihad and these six airlines together serve more than 340 destinations with a fleet of 511 aircraft. In 2012, they carried a combined total of more than 91 million passengers.

Hogan said that 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," he said.

Hogan said the foundation investment in airberlin had delivered significant gains to both carriers, with more than 260,000 passengers flying on their combined networks in the first half of 2013 - more than four times higher than the first half of 2012.

Together, the airlines operate 42 flights each week between Abu Dhabi and four German cities - Frankfurt and Dusseldorf, Munich and Berlin.

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