Etihad: equity investment is a win-win strategy

ABU DHABI — Etihad Airways’ equity investment model has created a new force in global air travel, which protects and promotes competition, said the airline’s president and CEO James Hogan, in Melbourne on Thursday.

Speaking at a city business luncheon, Hogan outlined the challenges facing airlines who try to bring new competition to global markets.

He said: “In a world of mega connectors and mega alliances, it is impossible to go it alone when trying to compete on the global stage. The regulatory challenges, the daunting cost of entry and the might of the legacy carriers create incredibly high barriers.

“At Etihad Airways, we have had to build everything from scratch, investing in all the infrastructure of a global airline. So in addition to the obvious multibillion dollar investments in aircraft and engines, that means investment in people, investment in technology, investment in real estate and investment in our brand.

“For Etihad Airways, it also meant investment in partners. A network carrier needs global reach if it is to compete effectively and the market is too mature, too dominated by legacy interests. We’ve used partnership since day one, in the form of a growing codeshare network, but the equity investments took that approach to a new level.”

Etihad Airways, which has 49 codeshare relationships with airlines across the world, has taken minority equity investments in airlines in strategic markets, including Virgin Australia, Alitalia, Jet Airways, airberlin, Air Serbia and Air Seychelles.

“As with any partnership, these investments only work because both partners see benefits. Etihad Airways has seen a massive impact in extending our network reach and in feeding guests onto our routes. But that feed goes both ways.”