Etihad revamps for turnaround
Etihad Airways unveiled a restructuring and new operating model as it embarks on the next phase of transformation.
dubai — Etihad Airways unveiled on Tuesday a restructuring and new operating model as it embarks on the next phase of transformation.
The Abu Dhabi-based carrier, which has been overhauling its business since 2016, said the reorganisation of its operations into seven business divisions would help it improve operational performance.
A new leadership team, reporting directly to Group chief executive Tony Douglas, will head the seven divisions that include operations, commercial, maintenance, repair & overhaul, human resources, finance, and support services and transformation, the company said in a statement.
As part of the new structure, Douglas has taken over direct responsibility of the airline from Peter Baumgartner.
The airline said the move is the next step in “ensuring the group is fit for purpose to prosper as a people-focused business driven by innovation, safety and sustainability, supporting Abu Dhabi’s vision for the future.”
While full details about the restructuring have yet to be revealed, reportedly they include reviewing billions of dollars of aircraft ordered from Airbus and Boeing.
Etihad has been in the red since 2016 in the backdrop of a slowdown in airline passenger growth even as its investments in foreign airlines such as Air Berlin and Alitalia failed to deliver returns as expected.
Mohamed Mubarak Fadhel Al Mazrouei, chairman of Etihad Aviation Group, said the reorganisation and restructure of the group and leadership team would help the company lay the foundations for Etihad to optimise its value as a world-leading group, streamline operations and capitalise on opportunities, allowing the business to focus on improving its core operating performance.
“We recorded an improvement in our operating results for 2017 and are confident that we are back on track this year, strengthening our position group-wide after a period of consolidation, bolstering our presence in key global markets, and continuing to support Abu Dhabi’s growth in the aviation, trade and tourism sectors,” said Al Mazrouei.
Baumgartner will now serve as the senior strategic advisor to Douglas as part of the executive leadership team.
Mohammad Al Bulooki, Etihad Airways executive vice-president commercial, has been promoted to chief operating officer.
“We are now well-equipped to deliver our plans as a reinvigorated innovator brand, with an optimised and profitable network, technologically advanced fleet and a strengthened position as the global airline of choice, run by a seasoned team of talented professionals. The fact that almost half of our leadership team are UAE nationals reflects our strong succession planning efforts and commitment to developing Emirati talent,” said Douglas.
Etihad’s transformation programme has delivered measurable
We are now wellequipped to deliver our plans as a reinvigorated innovator brand
Tony Douglas, Group chief executive, Etihad Aviation Group
results to date, with the core airline division recently reporting a 22 per cent improvement in core operating performance for 2017, driven by improved revenues of $6.1 billion and a 7.3 per cent reduction in unit costs.
“We are already seeing positive results even during this early phase of our transformation,” said Douglas.
Saj Ahmad, an analyst at London’s StrategicAero Research, said Etihad’s new management has proved that it can turn losses around, as shown by financial results for 2017.
“While the new seven portions of the business appears to add more complexity, Etihad has better oversight now over all operations with a view to suppressing costs and improve efficiency. But with Etihad expanding its 787 fleet, it’s likely that future capital expenditure on airplanes not in its fleet, like the Airbus A350s could well be axed,” Ahmad told Khaleej Times.
— issacjohn@khaleejtimes.com