8-Feb-2011 10:08 AM

Etihad CEO brushes off concerns about cannibalisation

Etihad Airways CEO James Hogan stated the airline's codeshare agreement with Air New Zealand will not affect its partnership with Australia's Virgin Blue Group, but rather insisted the Air New Zealand deal is "complementary" to both Etihad and Air New Zealand's alliances with Virgin Blue (Australian Financial Review, 08-Feb-2011). Etihad's codeshare agreement with Air New Zealand means the two airlines will be in competition with V Australia's Australia-Abu Dhabi services. But Mr Hogan stated that Virgin Blue will benefit through its trans-Tasman JV with Air New Zealand, as the two share revenue on routes between Australia and New Zealand. Virgin Blue and Etihad do not, however, share revenue on services between Australia and Abu Dhabi. Mr Hogan believes that as a result of Etihad's latest codeshare agreement, demand will be boosted on Air New Zealand's trans-Tasman services, which will benefit Virgin Blue, and feed Etihad's long-haul services. The deal remains subject to regulatory approval in New Zealand, but does not require Australian approval as services will not be market in Australia.

Etihad Airways: "I don't see it as cannibalisation. John [Borghetti], Rob [Fyfe] and I are all developing strong business and leisure propositions. What this means for a corporate customer is we're able to work as one." James Hogan, CEO. Source: Australian Financial Review, 08-Feb-2011.

Etihad Airways: "Australia has alway been a tough market to compete in. This gives us [Etihad] a much stronger proposition to improve the quality of our yield out of Australia particularly in the premium segment. The flip side is I can also feed more business into Australia." James Hogan, CEO. Source: Australian Financial Review, 08-Feb-2011.

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