Etihad Outlines Growth of Australian Operations

Etihad Airways, the national airline of the United Arab Emirates, last week outlined a range of major changes to its Australian operations, including new aircraft, new routes, additional flights and new airport facilities. Speaking in Sydney at the CAPA Australia Pacific Aviation Summit, the President and Chief Executive Officer of Etihad Airways, James Hogan, said Australia was a key and long-term market for the airline and one for which there were exciting growth plans.

According to the Australian executive, the airline’s future steps for Australia include the introduction of the Airbus A380 on routes to Sydney and Melbourne from Abu Dhabi, additional flights to Melbourne and Brisbane from the UAE hub, the commencement of non-stop flights between Abu Dhabi and Perth and the construction of premium lounges at Sydney and Melbourne Airports from 2014.

He also reaffirmed that Etihad Airways was already moving to increase its equity in Virgin Australia, following recent approval by the Foreign Investment Review Board to increase from a 10 per cent shareholding to 19.9 per cent.

“Virgin Australia is a key member of our ever-expanding airline equity alliance, and Etihad Airways is an active and long-term investor in Virgin,” said Hogan. “We have a significant presence in Australia, with 28 weekly departures, annual expenditure of over $100 million, direct employment of 106 staff and engagement of 415 local contractors. The Virgin Australia partnership enables us to connect with 45 destinations in Australia, New Zealand and South-East Asia, while we reciprocate by providing connections via our Abu Dhabi hub to a wide range of destinations in Europe, UK, Ireland and Africa.”

Hogan also highlighted the contribution of codeshare partners such as Air France, KLM, Alitalia and Air Serbia to strengthening Etihad’s position between Australia and Europe. “Together with our partners, we have a continuous wave of flights coming down from Europe over our global hub in Abu Dhabi with connections to a significant network of destinations,” he said.

The Etihad equity alliance – an alternative to legacy airline alliances – now has five members, following a deal earlier this month to invest in Serbia’s national airline. The UAE carrier also is awaiting regulatory approval for investment in a sixth airline, India’s Jet Airways, which gives the equity alliance a combined total of more than 420 destinations, 500 aircraft and more than 96 million passengers each year, while there are growing suggestions that a deal to acquire a stake in LOT Polish Airlines is on the cards. The Polish treasury confirmed recently that it is once again seeking an investor for the Star Alliance partner, which recorded a €38 million loss in 2012.

Etihad currently operates a daily link between Abu Dhabi and Melbourne using Airbus A340 equipment, eleven flights per week between Abu Dhabi and Sydney (a daily Boeing 777 and four times weekly A340-600 service) and a daily link between Abu Dhabi and Brisbane, via Singapore using an A330-200. Based on this month’s flight schedule the UAE carrier has a total of 50 return services a week in and out of Australia providing a total of 14,754 seats.

In the table below we highlight the largest O&D markets for Etihad’s flights to and from Australia and the European market dominates the passenger traffic. In 2012 just under 500,000 bi-directional O&D passengers flew on Etihad’s flights in and out of Australia and latest statistics for the first five months of this year show demand up 9.3 per cent on the same period in 2012. In total passengers on the UAE carrier’s Australian services began or ended their journeys at 307 different airports, with just 7.5 per cent flying from or to Abu Dhabi.