Etihad Airways intends to remain a major global carrier as it works on re-sizing its global business following record losses, according to new Chief Executive Officer Tony Douglas.
The Persian Gulf company, which has built up a vast inter-continental route network and spent billions of dollars on plane purchases, has no intention of becoming a “boutique” operator and still aspires to being an “airline of choice,” Douglas said Monday in Abu Dhabi, where Etihad is based.
Douglas also held out the prospect of closer cooperation with one-time rival Emirates, touted for a possible merger since Etihad fell on hard times. “I do admire what I observe from our great friends in Dubai,” he said. “We will continue to consider where appropriate the things that we could do together.”
The airline remains a relative “adolescent” in aviation terms, the CEO said, and will “look to learn” from Emirates, the biggest of the three main Gulf carriers and the world leader on long-haul routes.
Emirates President Tim Clark has said antitrust rules give limited room for manoeuvre and that a merger is unlikely, though ultimately a matter for the rulers of Dubai and Abu Dhabi.
The airlines also both have small home markets and compete for the same passengers changing planes on long-haul trips.
Right-sizing Etihad's network
According to one scenario, Etihad could give up on chasing global standing in the mass market and double-down on targeting top-end travel, where it’s one of only 10 five-star airlines worldwide.
Etihad's failed investments in Alitalia and Air Berlin - which both filed for insolvency last year after Etihad pulled the plug on funding – have led to a more “strategic” approach to expansion, according to Douglas, who took over in January.
“That would be the take out, to be very disciplined, very measured,” Douglas said at the 2018 Global Aerospace Summit. “What we have embraced properly is a way to develop growth in a sustainable way. We will choose wisely; we will make sure that detail is well-attended to.”
Etihad poured billions of dollars into struggling airlines around the world under Hogan’s so-called Equity Alliance strategy in a bid to quickly add more customers and propel the company into the global aviation elite.
Etihad has been working on restructuring plans for the best part of a year after posting a US$1.87 billion loss for 2016 that cost previous chief James Hogan his job.
While the carrier is cutting passenger destinations including Perth and Edinburgh, Douglas has so far held off from announcing widely anticipated plans for further fleet and network cuts.
Cost-cutting measures recently implemented have included axing the complimentary chauffeur service for business class and first class passengers; closing the Style & Shave salons at its flagship Abu Dhabi first class and business class lounges; no longer issuing pyjamas in business class; letting economy travellers buy their way into business class and even first class lounges; selling access to its Melbourne lounge VIP room formerly used by guests in the Airbus A380 three-room Residence suite; and tightening the screws on its Etihad Guest frequent flyer scheme.