With the help of a Hunter strategy copied by Swissair, Etihad Airways wanted to create a global airline group. Just like with the Swiss, the concept of buying into ailing airlines did not work out. After many billions of US dollars burned, the golf carrier now wants to massively downsize.

The parallels to the failed hunter strategy of the former Swissair are clear: Both airlines made large purchases from airlines that were financially on the brink. A frequent flyer program was created in each case and the carriers were to be kept on a “short leash”. In both cases, however, the concept did not work because the capital requirements of the troubled investments were a bottomless pit. Swissair thus went bankrupt and many airlines that it bought from do not exist today. Etihad Airways turned the money off the “daughters” and they went bankrupt in a row. Only Air Serbia and Air Seychelles remained, both of which were already badly hit before the corona pandemic. However, the Serbs can be happy that the majority owner - the state - is clearly committed to the carrier and can keep it in the air. Alitalia was saved from the grounding by the Italian state and should be set up again.

Etihad Airways destroyed many billions of US dollars with the failed strategy and had little of it in its own flight operations. This was in deficit right from the start and the hope that more travelers will transfer in Abu Dhabi through the investments was not fulfilled. Nevertheless, the fleet was massively expanded and the aircraft type Airbus A380 was also added to the fleet. True to the motto: What the competition in Dubai can do, we can too.

As with almost all other airlines, the situation at Etihad is tense due to the corona pandemic, because the almost unpredictable entry and quarantine regulations have an extremely negative effect on demand. The result is that the lion's share of the fleet is on the ground. That also includes the super jumbos. Since about 2017 one has tried again and again to hand over the carrier to the relatives in Dubai in order to be able to carry out a subsequent merger. This has not happened so far and Emirates has very good reasons not to step on the accelerator, but rather to reject the “deal” requested by Abu Dhabi.

The emirate of Abu Dhabi has meanwhile also changed its aviation strategy and has participated in two low-cost startups. Air Arabia Abu Dhabi has a stake through Etihad Airways and the state holds the shares in Wizzair Abu Dhabi through a holding company. In the long term, growth is not seen in a “luxury carrier”, but in the low-cost flight segment. Of course, this has an impact on Etihad Airways, regardless of the corona pandemic. The crisis accelerates the implementation of the new aviation strategy of the emirate of Abu Dhabi.

Etihad Airways will continue to exist in a much smaller form, because tourists are mainly to be brought to the capital of the United Arab Emirates with the two low-cost airlines. The state carrier, however, reduced according to a press release in all areas. This also expressly includes the management, which is being radically rebuilt. They want to create a flat structure, because Etihad is no longer a large airline group. The fleet currently has ten A380s, although these will not be used in 2021. Whether they will ever take off for the golf carrier again is in the stars. The company only announced that it will only think about it when demand allows it again. It could also be that the superjumbos disappear without a sound or a song from the fleet.

In the future, the carrier is to be positioned above the low-cost market and concentrate on the classic full-service segment. Gone are the days when you wanted to score with pure luxury. The route network is being downsized and should focus on profitable routes in this business area. Much is left to the two low costers, in which the state is directly or indirectly involved. The fleet will therefore be reduced in the long term, but Etihad did not provide any information on the extent.

Management was much more talkative, as numerous top managers have to leave the company. This affects, among others, Chief Commercial Officer Robert Kamark, Head of Sales Duncan Bureau, Chief Transformation Officer Akram Alami and Mutaz Saleh, who was previously responsible for compliance. Some of those who are allowed to stay are given new tasks. 

“We cannot continue to orientate ourselves on a market development that has changed for the foreseeable future”, CEO Tony Douglas explains the restructuring of the management and the group. Etihad Airways must take various measures, adapt the business model and position itself as a “proud, medium-sized carrier”. There is no longer any talk of the previous plans to create a “global airline group”.