News
Hogan to depart Etihad in second half; Emirates embarks on modest restructuring
January 27th 2017
Etihad Aviation Group president and CEO, Australian-born James Hogan, will step down from the fast-expanding conglomerate in the second half of 2017, the group announced on Tuesday. Read More »
Group chairman, Mohamad Mubarak Dadhel Fadhel Al Mazrouei, paid tribute to Hogan’s ten years, initially as CEO of Etihad Airways and since last year as president and CEO of the wider group.
“In just ten years, he has overseen the growth of the company from a 22 plane regional carrier into a 120 aircraft global airline and aviation group, with seven airline equity partnerships which together serve more than 120 million guests every year,” he said.
Mazrouei added that Etihad’s board and management are continuing to conduct a company-wide strategic review, particularly with a view to its investments in underperforming airberlin and Alitalia.
“We must ensure the airline is the right size and the right shape. We must continue to improve cost efficiency, productivity and revenue. We must progress and adjust our airline equity partnerships even as we remain committed to the strategy,” Mazrouei said.
Delivering a keynote address at the 19th Annual Global Airfinance Conference in Dublin last week, Hogan defended Etihad’s partnership strategy. He said it had resulted in 5.5 million passengers connecting onto the Etihad Airways network from codeshares and partners in 2016.
“Jet Airways, Air Serbia, Air Seychelles, Virgin Australia and Etihad Regional have used our capital investments to help structure their businesses into more efficient and profitable operations. In those cases, our long term investments are already delivering a return,” Hogan said.
He said airberlin and Alitalia “are operating in very tough competitive environments and need to address long-standing issues facing their businesses,” Hogan said, and added airberlin’s strategy was “now on track” while Alitalia was working on a business plan to address its issues.
Hogan, together with Etihad Aviation Group CFO, James Rigney, will join an unnamed investment company later this year. A search for a new CEO and CFO is underway.
In neighbouring Dubai, Emirates Airline on Monday told Reuters it was undergoing a “modest restructuring” after posting a 75% slump in first half profits in early November. According to the report, approximately 1,000 workers have left the carrier in the past quarter while others were reshuffled into new positions. "Where roles were impacted, full support has been given to explore redeployment opportunities within the organisation," Emirates said.
Emirates also made some changes to its crew accommodation policy in late December, effectively slashing allowances for employees who lived outside company housing.
Emirates made global headlines this week when it was announced it would launch a daily three-class B777-300ER fifth freedom route between Athens and New York’s Newark from March 12 at the request of the Greek government. The carrier operates a daily Milan-JFK A380 service and it has previously said the Hungarian government had invited it to launch fifth freedom flights from Budapest. Both Greece and Hungary lack a national long-haul carrier.
The Partnership for Open & Fair Skies, representing major U.S. carriers, reacted to the Athens announcement saying Emirates was “throwing down the gauntlet”.
