Etihad Airways: ‘Embracing Change Breathes New Life Into Alitalia’

Un aereo della compagnia Etihad con uno dell’Alitalia sullo sfondo all’aeroporto di Fiumicino, 18 luglio 2014. ANSA/ TELENEWS

Etihad Airways, a key investor in Alitalia, believes Italy’s national airline has “fantastic potential to grow” – but only if it embraces change.

Speaking in Milan to the International Forum of Sovereign Wealth Funds, James Hogan, the President and Chief Executive Officer of Etihad Airways, and Vice Chairman of Alitalia, said that, “last year, Alitalia was on the verge of collapse.

“We invested 560 million euros as part of a €1.76 billion restructure of Alitalia,” said Mr Hogan. “Today, we are the largest single shareholder, with a 49 percent stake. What did we see in Alitalia that nobody else did? A great brand, a great network, but a poor business in need of a new direction.”

Mr Hogan said Etihad Airways saw great potential for both airlines to grow efficiently by working together. “Partnership offers lower risks, greater rewards and faster outcomes than ‘going it alone’,” he said. “That’s good for Alitalia, good for Etihad Airways, good for Italy and good for consumers.”

Mr Hogan said Etihad Airways and Alitalia had complementary route networks which, combined, offered approximately 200 destinations. He said Alitalia gained significant new flight connectivity by connecting with Etihad Airways at its hub in Abu Dhabi, providing extensive access to destinations across Asia, and in Australia and Africa – destinations not served by Alitalia.

But he said the Etihad – Alitalia partnership offered much greater benefits for customers including the alignment of inflight product and service, expansion of both carriers’ frequent flier programs, and synergy benefits including joint procurement and resource sharing.

Recently, Etihad Airways and six equity partners, including Alitalia, participated in an innovative capital raising, through which US$700 million was collectively sourced from global financial markets.

“Alitalia’s Chairman, Luca Cordero di Montezemolo has a clear vision for the success of the Alitalia business, one which we share fully. Together, we are working to re-establish the airline to its rightful place as one of the great international brands,” said Mr Hogan.

“Alitalia is ascending. But it still faces challenges. It cannot afford to revert to past practices. For Alitalia to survive and thrive, there must be a relentless focus on costs and efficiency, coupled with a commitment to delivering quality, innovation and value for money. Through our partnership, we can achieve success together.”