Dubai
Etihad Airways’ President and Chief Executive, James Hogan, defended his airlines stake holdings in a number of European airlines in a speech yesterday at a European Union conference in Vienna.
“External investment is not a threat. It is an opportunity to strengthen airlines, and to support employment and economic growth,” Hogan said according to an Etihad statement.
The conference addressed the issue of air transport competitiveness in Europe.
Etihad is expected to take a 49 per cent stake in Italy’s troubled national carrier, Alitalia. Principal terms between the two airlines have been agreed. Italian unions, however, moved to disrupt the deal this week by calling for a national industry strike because pilots and flight attendants have reportedly been excluded from the talks.
If the deal does go ahead it will be Etihad’s fifth minority stake in a European airline alongside Air Berlin, Air Serbia, Etihad Regional (formerly Darwin Airline) and Aer Lingus. It has pumped significant capital in all but Aer Lingus. Former Etihad employees has taken up management posts at Etihad Regional and Air Serbia, the latter seeing a former employee replacing the chief executive. Etihad has a five-year management contract at Air Serbia.
The statement suggested that “some carriers could even fail” without the capital investments from Etihad.
Alitalia is in significant financial trouble, while Etihad is working to turnaround loss making carriers Air Serbia, Etihad Regional and Air Berlin while also feeding traffic through its Abu Dhabi hub. European carriers, led by Lufthansa, have been highly critical of the three major Gulf carriers, which also include Emirates and Qatar Airways. The three airlines have been accused of receiving state subsidies backed by government coffers. “Etihad Airways is wholly-owned by the Government of Abu Dhabi. We received start-up capital, like every airline does, but we receive no state subsidies, no free fuel and no reduced airport charges in the UAE,” Hogan said in his speech.
In May, the Australian Financial Review (AFR), citing leaked documents, reported that Etihad Airways received a $3 billion loan term interest free loan from the Abu Dhabi ruling family. Etihad has said the documents were drafts.
