Tag: Etihad

Etihad Airways has  cautioned  that it may take several months to close the deal for a 49 per cent  stake in Alitalia.

Etihad said the agreement with Alitalia was the latest step in a process which could lead to the finalisation of a proposed transaction.

According to a statement by the Abu Dhabi-based airline, while “principal terms and conditions” had been agreed upon, several steps remain before the deal is sealed.

The statement further said: ‘’Further steps will include: completion of the transaction documents; finalisation of the conditions precedent; application for regulatory approval; and final shareholder and board approvals,”  adding, “These next steps will be worked through over the coming months.”

The statement said Alitalia urgently needs the infusion of cash that Etihad will provide through its equity purchase. Despite a major rescue package that was finalised at the end of last year, Alitalia has continued to hemorrhage cash. Industry observers believe it is likely to run out of cash by the end of the summer.

Alitalia, like many European legacy carriers, has faced tough times in recent years. Italy, in particular, has proved lucrative for low-cost carriers, which have eaten into Alitalia’s domestic market. The airline also faces competition on its home turf from Italy’s growing high-speed rail network.

Etihad Airways said it is increasing its global presence through a mix of organic growth and strategic partnerships.

Speaking at the FVW Kongress in Cologne, Germany, the President and Chief Executive Officer of Etihad Airways, James Hogan, said the airline is engaged in three major transactions.

He listed the transactions to include 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,” said Mr Hogan. “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.”

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, subject to final approval, the Jet Airways investment.

Together, Etihad Airways and these six airlines serve more than 340 destinations with a fleet of 511 aircraft. In 2012, they carried a combined total of more than 91 million passengers – comparable to large airline partnerships in Europe and Asia.

“Equity investments deliver synergy benefits which cannot be achieved through legacy airline alliances,” Mr Hogan said. “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.”

Mr 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.

Etihad Airways now codeshares on 61 airberlin routes, while airberlin codeshares on 31 routes of Etihad Airways. Together, the airlines operate 42 flights each week between Abu Dhabi and four German cities – Frankfurt and Dusseldorf (both airlines), Munich (Etihad Airways), and Berlin (airberlin).

In addition, plans are being implemented to leverage a range of other synergies.

The Etihad Guest and airberlin Topbonus loyalty programs have been integrated, enabling guests on both carriers to earn and redeem mileage points on either airline.

Reservations and ticketing facilities for airberlinwill be established in Etihad Airways’ new European headquarters in Berlin.

And both airlines have agreed to identical interiors, engines and a joint implementation program for their new Boeing 787-9 aircraft, the first of which will enter service in 2014.

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

Etihad Airways will take delivery of 14 new aircraft this year, four A320 passenger aircraft, one A321 passenger aircraft, and one A330 freighter from Airbus; two B777 freighters, and six B777-300ER passenger aircraft from Boeing.

The airline has announced it will start flights to at least three new destinations in 2013, Washington DC in March, Sao Paulo in June, and Ho Chi Minh City in October.

Etihad Airways  surpassed its target of carrying 10 million passengers in 2012 and is set to achieve a 22 per cent increase on the total of 8.41 million passengers for 2011.

The increase in passenger numbers – up to a total of 10.29 million – represents an extra 1.88 million passengers travelling on the carrier’s global network that now covers 87 of its own passenger and cargo destinations, and 245 codeshare destinations.

The passenger growth for Etihad Airways is mirrored by its equity partners. By the end of 2012, airberlin is expected to have carried 33.4 million passengers, Virgin Australia 19.5 million passengers*, Aer Lingus nearly 11 million passengers, and Air Seychelles 241,000 passengers.

The airline and its equity partners will have carried more than 74 million passengers in 2012, with cooperation between the five airlines greatly contributing to passenger growth.

An example of the success of this cooperation is the 300,000 passengers airberlin and Etihad Airways have delivered onto each other’s networks during the last one year.

Etihad Airways’ President and Chief Executive Officer, James Hogan, said: “Etihad Airways has achieved significant expansion in 2012 and, therefore, it’s very satisfying to pass our target of flying more than 10 million passengers during a year for the first time.

“We have launched flights to six new destinations during the last year – Tripoli, Shanghai, Nairobi, Basra, Lagos, and Ahmedabad – which have all contributed to the 22 per cent increase in passenger numbers.” Overall in 2012 Etihad Cargo carried a record 365,000 tonnes, 18 per cent more than in 2011.

Etihad Airways’ busiest route was Bangkok with the airline carrying nearly 691,000 passengers to the Thai capital during the year, a 38 per cent increase on 2011.

This was closely followed by Manila, Heathrow and Jeddah. Sydney, Paris, Frankfurt, Manchester, Doha and Dublin complete the list of the 10 most popular routes.

During 2012 Etihad Airways beat its previous record for the number of passengers carried in a singlAe day with 33,766 passengers flying on Saturday 14 July. The airline took delivery of seven new aircraft in 2012, three Airbus A320s and four Boeing B777s.