The concept of an “airline” is a familiar one: a single company operates specific aircraft to specific places, either regularly…
Etihad Airways Continues It’s Unique Growth Strategy of Co-Ventures
While many have watched in recent years how the Middle Eastern carriers, including Etihad Airways, Emirates Airlines, and Qatar Airways have grown dramatically, Etihad has pursued and succeeded in a unique growth strategy of co-ventures around the world.
Founded in July 2003 by the government of the United Arab Emirates, Etihad has quickly grown from a small carrier with service to Beirut, into one of the fastest growing carriers in the world currently serving more than 100 destinations around the globe. However, in recent years Etihad has found much success in supporting other brands around the globe that are mutually beneficial.
Just this past week, Etihad was approved for a 33.3 percent stake in Darwin Airline, allowing it to grow its network to serve more cities in Switzerland and other European countries.
“Together with our code-share and equity alliance partners, we have created a virtual network of more than 375 destinations,” James Hogan, Chief Executive Officer of Etihad stated in 2013. “This collaborative model gives us scale and enhanced global market access in constrained regions. But more importantly, it strengthens our customer proposition by offering more choice and better connections across our hub in Abu Dhabi.”
This is not the first co-venture that Etihad has been engaged in over the past several years. Etihad currently maintains stakes in Air Berlin, Aer Lingus, Virgin Australia, Alitalia and Air Serbia. Each of these unique partnerships have allowed Etihad to grow their brand name and network without the major costs and regulation issues that come from attempting to start service in already congested markets.
While Etihad has seen significant growth in the way of its network, struggling carriers have seen significant capital investment in a time of great need. Alitalia, based in Rome, has struggled nearly every year since its foundation in 1946 to turn a profit, and had filed for bankruptcy protection in August 2008. In 2014 Etihad agreed to purchase a 49 percent stake in Alitalia pending approval from the Italian government, and has since pledged to return Alitalia to profitability by 2017.
“We wouldn’t have invested in Alitalia if we hadn’t thought the industrial plan would be successful,” Hogan said. “I’ve been told not to say it but I do believe Alitalia can be the sexiest brand in Europe in aviation.”
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