Dubai: Etihad Airways announced a new partnership structure on Wednesday that will open its joint-purchasing programmes to non-equity airlines for the first time. The airline said members of the new “Etihad Airways Partners” structure will save costs through codeshare agreements, joint procurement and staff training at Etihad’s facilities.
Initial members are Air Berlin, Air Serbia, Air Seychelles, Jet Airways and Etihad Regional (formerly Darwin Airline) — all airlines that Etihad holds stakes in — along with the Abu Dhabi carrier.
Airlines that sign up to the formal structure will carry an “Etihad Airways Partners” logo on their aircraft and branded materials.
“It seems Etihad is formally branding its partnership strategy and differentiating between its [more than 40] basic partners and closer ones,” said Will Horton, senior analyst at CAPA — Centre for Aviation, by email.
Virgin Australia and Aer Lingus, which Etihad owns stakes in, however, have not signed up to the new structure. Neither airline has previously tapped into joint procurement or training but codeshares with its shareholder.
Etihad has invited other airlines to join the new structure that would see them benefit from the same cost-saving strategy without having to sell a stake to the Abu Dhabi carrier.
Cost savings
Etihad has more than 200 aircraft on firm order and says it is able to move around its orders, and purchasing power, to airlines it holds stake in.
“The traditional alliances have not delivered significant cost savings whereas Etihad aims to, in addition to generating extra revenue,” Horton stated.
The Abu Dhabi carrier is not calling the business model an alliance and even inviting traditional alliance members to join the new structure without restriction.
The pitch for other airlines is that Etihad will be able to offer improved networks and schedules and enhanced frequent flyer benefits.
Horton stated that the future membership of the new structure by alliance airlines will depend on how the alliances perceive the new strategy as a marketing or competing entity.
“If you engage in a commercial project with Etihad, is that a bilateral arrangement or could it come under the partner’s banner?” he asked.
Etihad holds board seats on all of the airlines that signed up to the new structure except for Etihad Regional, in which the Abu Dhabi carrier’s 33.3 per cent stake is pending regulatory approval.
The European Commission is also looking at Etihad’s near 30 per cent holding in Air Berlin to see if the Abu Dhabi carrier is complying with foreign ownership and control rules.
