Equity investment model ‘protects and promotes competition’

Etihad Airways’ equity investment model has created a new force in global air travel, which protects and promotes competition, said the airline’s President and Chief Executive Officer James Hogan, in a speech in Melbourne today.

Speaking at the City Business Luncheon at Melbourne City FC, Mr Hogan outlined the challenges facing airlines trying to bring new competition to global markets. He said:

“In a world of mega-connectors and mega-alliances, it is impossible to go it alone when trying to compete on the global stage. The regulatory challenges, the daunting cost of entry and the might of the legacy carriers create incredibly high barriers.

“At Etihad Airways, we have had to build everything from scratch, investing in all the infrastructure of a global airline. So in addition to the obvious multi-billion dollar investments in aircraft and engines, that means investment in people, investment in technology, investment in real estate and investment in our brand.

“For Etihad Airways, it also meant investment in partners.

“A network carrier needs global reach if it is to compete effectively and the market is too mature, too dominated by legacy interests, for any new carrier to get that reach on its own.

“We’ve used partnership since day one, in the form of a growing codeshare network, but the equity investments took that approach to a new level.”

Etihad Airways, which has 49 codeshare relationships with carriers across the world, has taken minority equity investments in airlines in strategic markets, including Virgin Australia, Alitalia, Jet Airways, airberlin, Air Serbia and Air Seychelles.