Etihad Airways and Air France expanded (30-May-2013) their codeshare agreement to include Paris CDG-Oslo and Paris CDG-Stockholm services operated by Air France and Abu Dhabi-Khartoum, Abu Dhabi-Melbourne and Abu Dhabi-Sydney services operated by Etihad Airways. Subject to regulatory approval, the airlines also plan to include Air France services from Paris to Lisbon and Marseilles and Etihad Airways' Singapore-Brisbane and Abu Dhabi-Kathmandu services under the agreement. Etihad Airways currently operates twice daily Abu Dhabi-Paris CDG service. Etihad Airways chief strategy and planning officer Kevin Knight said, "Enhancing connectivity, making the journey easier and more enjoyable, increasing choice, and seamlessly integrating operations over each airline’s respective hub, continues to underpin our strategy for building a world-class global network." As previously reported by CAPA, Etihad Airways also expanded its codeshare networks with KLM and Air France-KLM-Martinair Cargo in May-2013. [more - original PR]
Etihad Airways and Air France expand codeshare network
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Brexit follow-up Part 3: Gulf airlines, Turkish lose UK ally in M/E talks as protectionism spreads
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The EU now has mandates to negotiate open skies with states, including the UAE, Qatar, Turkey and the ASEAN bloc. The UAE and Qatar, home to the three Gulf network airlines, are expected to produce the most contentious negotiations. France and Germany will surely takes cues from Air France and Lufthansa to impede Gulf growth. In this light there are questions about whether the talks are genuinely motivated, or merely designed to draw out the discussion and thereby not produce any additional traffic rights while under negotiation.
What Air France and Lufthansa need is a real, lasting solution, rather than persevering Canute-like with stonewalling. Although a partnership seems logical, they may have waited too long. The Gulf airlines have found that they can succeed on their own.
Lufthansa and Etihad: equity tie up could further align mutual strategy, but marriage unlikely
Greater cooperation between Lufthansa and Etihad reflects their local and global challenges growing in quantity and complexity. Contact between the two has led to speculation that the partnership could radically expand to include an equity tie up, with rumoured merger talks.
Their initial Dec-2016 codeshare announcement was, in practical terms, small but showed the possibility, as they stated, to expand cooperation. However, it would be a leap to go from their handful of codeshares to a 17-Jan-2017 article from Italian daily newspaper Il Messaggero that Etihad could invest in Lufthansa on the way to a possible merger between the two. A subsequent denial in a Reuters story that "A financial stake is out of the question at the moment", does little to dispel the rumour. Were it not for the last three words of that statement the rumour would lack credibility.
There is certainly logic for a deeper partnership - and the two have danced this waltz before. Equity involvement from airlines can cement partnerships, add to board influence and partially allow one side to gain financially from any matter it feels it is compromising away. Nevertheless, there are obstacles to a full blown merger, and even to Etihad's taking a 30% to 40% stake. A marriage between the new bedfellows does not seem an immediate prospect. Nonetheless the logic is there for a move; and the mere fact of a potential move is sufficient to rock the equilibrium.