Etihad’s partnership with airberlin brings in $630m for Abu Dhabi

Etihad’s investment in airberlin, Germany’s second-largest airline, is the most high-profile example of its partnership strategy. Michele Tantussi / Bloomberg

Etihad’s investment in airberlin, Germany’s second-largest airline, is the most high-profile example of its partnership strategy, and has paid off for the airline and for the UAE, said its chief executive, James Hogan.

The Abu Dhabi airline has a 29.2 per cent stake and 81 codeshares with airberlin. However, it has faced opposition in German courts to some of those codeshares.

These issues were outweighed by the benefits from the alliance, Mr Hogan said.

“Even with an investment such as airberlin, where it has taken longer than expected for the airline to reach sustainable profitability, we are seeing incredibly strong returns directly into our business, far in excess of our original expectations.

"We have already received more than US$500 million in direct revenues to Etihad and airberlin today delivers more than $150 million a year in direct revenues, as well as wide-ranging cost synergies that have already reached more than $100m.

“In addition, the airberlin relationship is delivering a contribution of more than $630m a year to the Abu Dhabi economy. This is why we remain committed to the restructuring of that business as it moves forward,” Mr Hogan said.

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Partnership strategy

■ Etihad Airways achieves record financial returns as global alliances pay off – read here

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Other partners include the Italian flagship carrier Alitalia, which is being restructured with the support of Etihad.

Air Serbia, Air Seychelles, Jet Airways of India and Virgin Australia – also members of the equity alliance – are delivering on their profit and loss responsibilities, Mr Hogan said.

Etihad is one of three Gulf airlines under attack by American rivals for alleged anti-competitive practices in the US market, charges that they have strongly rejected.

Mr Hogan recently told an American aviation audience that Etihad’s entry into the United States market had also brought major benefits to the country.

“We are a tiny player in the US air travel market, with less than 0.01 per cent of daily international departures. However, we have been able to offer major benefits to the United States. Our total impact on the US economy is more than $440m a year.”

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