Etihad Airways increases Air Berlin stake
Originally published on www.businesstravellerme.com 19/12/2011 - Filed under: News »
Etihad Airways has increased its stake in Air Berlin from 2.99 per cent to 29.21 per cent, becoming the German airline's largest single shareholder.
As a key part of the deal, Air Berlin will shift its Middle East operation from Dubai, where it flies four times a week, to Abu Dhabi, and Etihad will have two seats on the Board of Directors of the German carrier.
Etihad will also provide five-year financing facilities of up to $255 million to support Air Berlin's fleet development and network growth.
The two companies will seek anti-trust immunity, which would allow greater co-ordination of route networks and sales and marketing activities.
Air Berlin CEO Hartmut Mehdorn said one of the key components of the new partnership is the launch of its services to Abu Dhabi, which will become its "new gateway to Asia and Australia".
From January 15, Air Berlin will operate direct flights from Berlin to Abu Dhabi four days a week with an A330-200. Bookings go live on Wednesday.
Mehdorn added it will "dramatically improve" global connectivity for its passengers in Germany, Switzerland, Austria, and throughout the GCC and Middle East.
European travellers will have immediate access to a total of 29 flights a week to and through Abu Dhabi from four German hubs, with a plan to increase to 42 flights from mid-April. The airlines' combined network spans 239 destinations across 77 countries.
Etihad will codeshare on 36 of Air Berlin's 171 destinations and Air Berlin codeshare on 24 of Etihad's 82 destinations and both airlines plan to further expand the codeshare pool. Etihad's codeshare involvement also extends to the Air Berlin group for all European activities including Austraian airline NIKI, and Swiss airline, Belair.
Etihad Guest and topbonus, the airlines' frequent flyer programmes, will be integrated, enabling passengers to 'earn and burn' on each other’s flights and offering reciprocal benefits, including status earning, to top tier members.
Etihad Airways CEO James Hogan said it has 34 airline partners, but this is its first equity investment in another airline.
"It is a sign of our confidence in Air Berlin's management and in the carrier's potential to grow with us. We expect such growth will also offer a host of additional employment opportunities, both in Europe and the UAE."
He estimated each airline could achieve incremental revenues of between €35-40 million in the first year. "We believe the partnership has enormous potential to unlock a range of efficiencies," he said.
For more information, visit etihad.com, airberlin.com
Report by Dominic Ellis
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