Etihad Airways CEO James Hogan, speaking at the CAPA Australia Pacific Aviation Summit, stated (07-Aug-2013) Gulf region traffic continues to double international average passenger traffic growth rates thanks to its geographic advantage as a connecting hub. Etihad Airways “cannot play catch up” with more established competitors such as Emirates and Qatar Airways and so pursued its own strategy of equity partnerships and codeshares, in concert with its own organic growth.
Etihad Airways: Gulf continues to double international growth rates
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Gulf airlines in 2017: Etihad cuts capacity 4% as Emirates and Qatar begin slowest growth in 5 years
For the first time in over a decade, a Gulf superconnector airline will reduce its annual capacity. Etihad is forecast to cut ASKs by 4% in 2017. Emirates and Qatar Airways will have their slowest growth expansion in a decade, but in terms of net capacity addition 2017's production increase is the slowest in about five years.
Etihad is contracting in all regions except Western Europe and Australia in 2017. The largest cuts will be in South America, North America and Southeast Asia, although this does not necessarily correlate to regional profitability. Despite the reduction Etihad's frequencies will be up 1% in 2017, mostly in Western Europe and South Asia.
Etihad has announced plans to reduce staff members, which it says will be largely through attrition. As it contracts instead of growing, its aircraft commitments – and in particular 787s – may be cancelled or deferred. Etihad's partnership with Lufthansa will result in its airberlin burden being reduced. Etihad may look to sell down European investment airlines, according to unconfirmed press reports.
Yet as Etihad recalibrates under a changed Abu Dhabi government, Qatar Airways continues to grow.
Brexit follow-up Part 3: Gulf airlines, Turkish lose UK ally in M/E talks as protectionism spreads
The Brexit referendum produced a vote for the United Kingdom to leave the EU, although this process has not yet been formally invoked. In the scope of aviation, one outcome is the potential loss of the UK in shaping air service agreement negotiations. The UK has been a liberalising voice, one that often counterbalanced more protectionist views from France and Germany. The UK is often able to galvanise the smaller EU states too.
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.