On Sunday, Abu Dhabi-based Etihad Airways reported they are making some major changes within their organization to become a “mid-sized carrier, streamline their processes and growth while still focusing on safety, security and service.”
Let’s take a look deeper look at what is taking place…
A MID-SIZED CARRIER
The carrier announced that they were taking “decisive steps” to become a mid-sized carrier and several executives were departing as part of an organizational restructure to address impact of the COVID-19 pandemic.
Etihad CEO, Tony Douglas said:
After our best-ever Q1 performance, none of us could have predicted the challenges that lay ahead in the remainder of this year. I’m extremely proud of the way my leadership team and the whole Etihad family have navigated the COVID-19 crisis so far, and I must express my gratitude to each member of the team for continually proving our adaptability to the most unexpected of circumstances.
As a responsible business, we can no longer continue to incrementally adapt to a marketplace that we believe has changed for the foreseeable future. That is why we are taking definitive and decisive action to adjust our business and position ourselves proudly as a mid-sized carrier. The first stage of this is an operational model change that will see us restructure our senior leadership team and our organisation to allow us to continue delivering on our mandate, ensuring long-term sustainability, and contributing to the growth and prominence of Abu Dhabi.
SO WHO IS LEAVING?
The aviation world is small and similar to many industries, executives simply move to another airline. So in the grand scheme of things, this is not a huge deal. However, it’s worth noting the names because I trust we’ll see them soon-ish (obviously not guaranteed since few airlines are hiring at the moment)…
- Robin Kamark – Chief Commercial Officer
- Duncan Bureau – Senior Vice President Sales & Distribution
- Akram Alami – Chief Transformation Officer
- Mutaz Saleh – Chief Risk & Compliance Officer
While the pandemic may have played a part, the truth is that Etihad has been struggling for years and long before the current pandemic ever appeared. In fact, the carrier has lost more than $5.6 billion in the last four years. But I think it’s worth noting that they “only” lost $870 million last year which was an improvement over years past.
- 2018: $1.28 billion loss
- 2017: $1.52 billion loss
- 2016: $1.95 billion loss
Personally, I remember when Etihad was one of the top aspirational airlines to fly. For example, this video (below) was released at the end of 2014 and it changed the industry forever…
Yes, that was only 6 years ago and surprisingly (at least for me), they are an airline that I’ve largely forgotten about (except when they give me free miles and status).
Over the past few few years, Etihad has become extremely aggressive in cutting costs in premium cabins including eliminating chauffeur service, eliminating pajamas in business class, and investing in struggling airlines in an effort to form their global alliance. For example:
- Airberlin (out of business)
- Alitalia (on the verge of going out of business as always)
- Air Serbia
- Jet Airways (out of business)
- …and many more
Unfortunately, bad decision after bad decision has lead the airline into this deep hole. But in my eyes, the current pandemic may have been its saving grace.
What do you make of the development? Have you ever flown Etihad? What was your experience?
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