[BusinessBabble]

CXDiamond – The shareholding in EI is an interesting one, EI seems to be doing quite well as a standalone niche carrier so I wonder where this one will go. Nothing really springs to mind as making a huge amounts of sense (transfer passengers for the daily flight to Abu Dhabi, Heathrow slots, mini hub in Dublin, etc.).

Hippocampus & JohnHarper – The Qantas & BA JSA and EI shareholding and government influence are completely different, one is a commercial agreement between two commercially managed public companies for a set period of time, and the other is a long term strategic decision by a national government. I would tend to agree with Hippocampus on this point, EY getting it’s hands on the Heathrow slots for use other than to Dublin would cause a national outrage!

MarcusUK – As things stand all a 49.9% shareholding is going to give EY is a 49.9% share of the AB losses that are stacking up. To date Etihad has invested about EUR500M during which losses so far announced (to 30/9/13) are about EUR130M. Singapore Airlines had a 49% shareholding in Virgin Atlantic for many years and it strategically gave them nothing as it does not give management control and financially gave them a £370M loss on the investment together with a 49% share of the losses Virgin Atlantic incurred during the period.

Whilst EY spends its management time trying to get these various investments in shape and adding value for EY, I wonder if EK and QR will gain an advantage through more traditional organic growth. Anyway, it’ll be an interesting one to watch.

[Hippocampus]

It’s very easy to go around spending someone else’s money, especially when there is a curious absence of rival bidders…

Again, how much money has Etihad spent on Air Berlin and how much has been burned?

A rag bag of minority interests in mainly marginal airlines is a far from proven model, unlike that of IAG.

[MarcusUK]

As stated by the CEO of Etihad, Alliances and the legacy Airline model have had their time.
IAG have their little world of forcing Iberia into becoming a decent Airline and turning it around.

Etihad have an investment strategy like no other Airline, and with that comes Board influence. Singapore, Air New Zealand and Etihad, own 60 % of Virgin Australia, and the CEO of Etihad will have a board place. Quite an influence. 10 % is owned by Branson.

Etihad’s strategy as commented on here, is a co-ordinated strategy, visible to those who can see further than conventional Legacy Airlines, who are having to massively re-structure.

Owned by the Government of the UAE, it spends its own money.

The investments and influences in other Airlines is growing and clearly beginning to link up as an alternative to an “Alliance”.

As for their own Business, 23 % increase in 2012 alone, not one EU Airline has matched that, and profit rose in 2013 by 48%!

In November, 2013, coinciding with its tenth anniversary, Etihad Airways signalled its long-term growth intentions when it announced the largest fleet order in its history, for up to 199 aircraft and 294 engines, at a current list price of approximately US$67 billion.
Hardly the activity of IAG or any counterparts in Europe!

Etihad is here to stay, and will be a greater presence through the investments and re-structuring it chooses to make, in a far more able manner than any current Management of any EU Airline.

[AMcWhirter]

Breaking: Etihad shareholding in European airlines to be investigated by the EC.

The EC is set to investigate both the Etihad investment plus the Delta investment in Virgin Atlantic, Aviation Week has tweeted this afternoon.

Will it effect Etihad plans in Europe ?

http://www.aviationweek.com/Article.aspx?id=%2Farticle-xml%2Favd_03_28_2014_p01-01-675798.xml#.UzV7X7i_T3Y.twitter

[transtraxman]

And about time too.

The Etihad investments are one thing which you accept or reject according to your personal bent – always when they comply with the law as is stands.

On the other hand, there is the lack of progress on the “open skies” agreement with the USA. This means that Delta is permitted to invest in 49% of Virgin Altantic, while the inverse is not true. No European airline is permitted to invest more than 25% in US airlines.

The examples are BA´s 25% interest in United, then its 25% in USAir, and KLM`s 25 % of North West.
These investments were before the “open skies” agreement, but significally have not changed since then to the benefit of the USA.

It is about time the EU put a stop to the injustice and forced the Yanks to comply with the spirit of the agreement.

It just goes to show you should not sign any treaty, agreement or whatever before tying up the loose ends.

Bully for the EU.

[TominScotland]

MarcusUK – I admire your enthusiasm for Etihad (and, indeed, KLM) but some of your statements are, perhaps, a little over enthusiastic?

“No squashing in more passengers adding extra seating into aircraft” – errrr, 10 across in Economy in their 777-300ER (three class) seems very squashed to me and is the same as the sardine cans operated by both KLM and Air France in similar aircraft. By contrast, BA, Cathay and others operate 9 across in that cabin and, believe me, that does make alot of difference to passenger comfort.

“They do not push themselves in like Emirates do” – where and into what have Emirates pushed themselves?

“Happy staff” – like those you’ve told us about on KLM? My recent AMS – SIN return experience with KLM was one where the cabin crew were indifferent and unhelpful. I hope that happiness Etihad-style is somewhat warmer……

[Lying-Flat]

Have to agree with MarcusUK that EY is here to stay. However, as long as Tim Clark will be able to just throw a dart in the map and say “let’s fly there,” EY will have to be super careful with their strategy.

If we look, for example, at the US, EK (and increasingly QR too) is pretty much present in all the major markets and whether EY also goes there or not, most of them are already oversaturated (LAX, as an example). Hopefully, EY can be creative with their network strategy.

Either way, this and coming years is going to be a fun game of darts to watch.

[JohnHarper]

MarcusUK – 28/03/2014 14:05 GMT +1.

I find the emerging EY business model exciting and want to see how it develops.

[CXDiamond]

I’m unsure why EY will not be allowed access to EI slots at LHR, the poster who asserts this gives no reasons for his stance so I assume it’s something he prefers to think will happen rather than something based on real information.

Tom, I’m sorry you had another miserable travel experience, you do seem to have a lot of them.

[TominScotland]

Thanks for your concern, CXDiamond. Yes, KLM was poor but had good travel experiences so far this year with QF, MH and BA so no complaints.

[AMcWhirter]

According to La Stampa, Etihad will shortly present a provisional business proposal to its board regarding a 40% stake in Alitalia.

http://www.ch-aviation.com/portal/news/26894-etihad-to-merge-alitalia-with-air-berlin-should-talks-succeed

[MarcusUK]

Tom…

Etihad certainly have First Suites which BA come nowhere near to, and do not have a Business class where you have to fly backwards with little privacy to the person next to you.

It was clearly stated on here that BA are reducing their Airbus A320/321’s to the same seat pitch as economy in Club Europe, and not keeping the middle seat perhaps…

There are many Airlines preparing for 10 across on the 777-3 unfortunately, and some such as Emirates, wanting 11 across on the A380, and the floor levels having to be adjusted for this!

Where have Emirates pushed themselves into?

1. They have taken much of Qantas’s business in and out of Australia.
Even though the Australian Lower House have passed the foreign ownership to be in majority, it will not pass the Senate they feel. Qantas are on the brink of losing all International routes, and are seriously in debt.

2. Air New Zealand have lost much of its trans Tasman routes. about 5 years ago, Emirates flew their 773-ER’s and A380’s into each Australian city, but then carrying on to Auckland, each morning.
Have you ever seen Auckland Airport with 5 Emirates planes between 4-7pm each day flying back to these Australian cities?

I did a few weeks ago when passing through Auckland, the whole International terminal exists for them at this time it seems, and prices half of other Airlines.

3. Germany and Lufthansa, when they took EK to The High Court, as they had entered their markets and undercut them on prices, again around 4 years ago. Lufthansa did not win.

4. EK have entered most major European cities, and the National Legacy Airline operating from there, has lost business to them hugely.

All extensively reported on here by the team at BT

I am intrigued with Etihad that do not cause such conflicts, and their unique approach.
Perhaps the days of Alliances are over…enough chat on here about how they are too big and no one is recognised anymore with Millions of members! (recent issue of BT highlights the membership numbers).

I am more than happy to have achieved my Gold card with Etihad now, and shall have it for at least 2 years, and well in time to continue to renew it for many years to come. Even their Silver card, gives you the same perks as a Silver card with an EU FFP!

[JohnHarper]

MarcusUK – 01/04/2014 00:31 GMT +1

Interesting also that LH have moved to code share with BD regional. I wonder if they have put any exclusions in the agreement.

[MarcusUK]

So what really apart from the rather Corporate speak, is Etihad doing with its “Legally separated” Guest program?
Nothing in the article about its changes or benefits.

I suppose it divides it from being a legal liability for the Airline, to its own entity, which could be a shrewd move for accounting purposes. Many Airlines mentions the FFP as a liability, so this is an interesting move by Etihad, as are many of their current strategies.

Any more info anyone?

[transtraxman]

Published yesterday by Airwise/Reuters,
“Etihad Near ‘Next Stage’ With Air Berlin”,

http://news.airwise.com/story/view/1396876168.html

We are still waiting for the announcement about Etihad investment in Alitalia which was meant to be last week. Still no news — any problems with job losses and/or debt?

[Author]

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