Etihad says strategy of buying stakes in European airlines aids competition
State-owned Etihad is building up a network of minority stakes in airlines around the world as it seeks to drive traffic to its Abu Dhabi hub.
“We are bringing competition in the market. Some legacy carriers are using the European Commission to challenge us rather than challenge us through competition,” said chief executive, James Hogan.
“We are open with our strategy, we can’t own or control any carrier because of bilateral, ownership rules,” he said.
Etihad currently has holdings in Air Berlin, Aer Lingus and Air Serbia, and is looking to buy a chunk of Italy’s ailing carrier Alitalia.
However, it has come under scrutiny from the European Commission which is examining several foreign holdings in European airlines to see if they comply with rules for operating an airline within the region.
These include Etihad’s stake in Germany’s Air Berlin, along with Delta Air Lines’ holding in Britain’s Virgin Atlantic.
In order to obtain an operating licence in the EU as a European airline, a carrier must be more than 50% owned and “effectively controlled” by an EU member state or EU citizens.
Etihad owns 29.2% of Air Berlin and a majority stake in its frequent flier programme. It recently invested €300m in the German airline via convertible bonds.
State-owned Gulf airlines, backed by strong oil revenues, are competing for dominance in the aviation industry and a larger share of the passenger base.
Yesterday, Etihad unveiled plans for passengers on its new Airbus A380s to fly in a three-room suite with a private butler, as it looks to woo high-end passengers from its biggest rival Emirates. Dubbed ‘The Residence’, the upper deck of the A380 would be transformed into apartments, a global first in the aviation industry, featuring a living room, separate double bedroom and ensuite shower room.
