Etihad Looks at Latin America Partnerships for Expansion
Etihad Airways PJSC Chief Executive Officer James Hogan is preparing to unveil a series of Latin American partnerships as the Middle East’s third-largest airline bolsters its global network of local cooperations
“We’ll shortly announce partnerships with a number of South American airlines,” Hogan said in an interview at the Singapore Airshow yesterday.
The agreements will let Etihad expand in the region without deploying its own aircraft. Hogan has relied on a mix of internal growth, with a fleet of 90 jets that is set to grow by 17 jets this year, code-share arrangements and direct investments in carriers such as Air Berlin Plc (AB1) to make up ground to Emirates, the world’s largest airline by long-haul traffic.
“It’s not a race, it’s about running a business and mapping a strategy,” Hogan said. “We are building a balanced network.”
Existing partnerships give Etihad connections to more cities than rivals, and the investment in Virgin Australia (VAH), in which Etihad holds a 19.9 percent stake, has helped the carrier tap 45 cities including in New Zealand, Hogan said.
Also on Hogan’s growth list is China, which Etihad serves directly with flights to Beijing, Chengdu and Hong Kong, while maintaining links to other locations via agreements with China Eastern Airlines Corp. and Hainan Airlines. (600221)
“We intend to grow in China over a period of time,” he said. “It’s a long game.”
Hogan, who is considering taking a stake in Italy’s Alitalia SpA’s in the latest equity investment in an ailing airline, has already committed to aiding Jet Airways (JBLU) India Ltd., in which Etihad holds a 24 percent share, and Air Serbia, where it acquired 49 percent last year.
Jet Airways and Etihad will work jointly to restructure the the Indian carrier and improve its finances, which Hogan said may take time.
“You don’t turn a business overnight,” he said, adding there was no question the carrier could become profitable.
A decision by the U.S. Federal Aviation Administration to downgrade the safety status of Indian carriers should have little impact on the turnaround effort since Jet will route flights through Etihad’s Abu Dhabi hub, Hogan said. Near-term, the Indian carrier’s focus will be domestic and European routes.
Even as it expands links to others, Etihad is working on upgrading its fleet and this year will introduce Airbus Group NV (AIR) A380 superjumbos and Boeing Co. 787 Dreamliners into service. The carrier said its A380 will feature amenities not seen before, Hogan said, without divulging details.
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