Etihad predicts Irish expansion

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Published: July 28, 2012

Etihad Airways (EY) anticipates an imminent expansion of its relationship with Irish flag-carrier Aer Lingus (EI), EY president and CEO James Hogan said in London Friday.

Speaking to ATW, he said the Abu Dhabi-Dublin route had been “very successful” for the UAE carrier and “you’ll see more developments in coming weeks.”

EY holds a stake of just under 3% in EI (ATW Daily News, May 3). The Irish government, which holds a 25% stake in the national carrier, plans to sell it off to help relieve its strained finances. “We’ve always said that when the Irish government divests we’re very keen to look at it, but they’ve not approached us on that,” Hogan said. “Until that’s timetabled I can’t say any more.”

EY has taken stakes in several airlines, a policy Hogan said is already yielding benefits for the participants and one that he preferred for its flexibility over becoming a member of a global alliance.

Its 29% stake in Air Berlin (AB), for example, had enabled the German carrier to find around €100 million ($ 123 million) of economies through such measures as using EY for training on its forthcoming fleet of Boeing 787s, rather than investing in its own simulators for the type (ATW Daily News, Dec. 20, 2011). AB plans to buy 15, EY 41.

Similarly, EY’s interest in Air Seychelles, in which it has a 40% stake and a management contract, had enabled EY to take on functions such as planning and training for the Indian Ocean airline (ATW Daily News, Jan. 30).

Hogan sees this pattern as the way forward for many carriers: “The challenge for small airlines is that they can’t afford overheads. We’ve proven with Air Seychelles that it can be a profitable operating unit and we would absorb the overheads that a small airline, moving forward, just can’t maintain.”

On equipment plans, Hogan said EY remained committed to the Airbus A350-1000, despite cutting its planned fleet of the variant from 25 to 12. The reduction was made purely due to concerns over Airbus’ ability to meet the delivery schedule. “All new aircraft are going to have issues on their entry into service,” he said. “We would like not to be at the front of the line, so other people can work out the problems.” He had no doubt the A350 would ultimately meet EY’s requirements.

Photo: Etihad president and CEO James Hogan

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