Caught wind of this on a PPRuNe thread!
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Excerpt from the Economist’s ‘Aviation in the Gulf: Ruler of the new silk road’
The new kid is Abu Dhabi’s carrier, Etihad. Set up in 2003 by royal decree, it claims to be the fastest-growing airline in the history of commercial aviation. An $8 billion order for new aircraft in 2004 was followed by the biggest ever at the Farnborough show in 2008. Worth about $43 billion at list prices, it included 100 firm orders, 55 options and 50 “purchase rights”. James Hogan, a bullish Australian who used to be chief operating officer at BMI (a British airline now owned by Lufthansa), ran Gulf Air for four years before being plucked by Abu Dhabi’s government in 2006 to oversee the expansion of Etihad.
Although in many ways Mr Hogan is following the model established by Emirates, there are differences. Abu Dhabi sees the airline as just one part of what it calls its “Plan 2030”, an ambitious attempt to use its huge oil wealth to turn the capital city of the United Arab Emirates into a global hub for transport, financial services and tourism that will be home to 3m people—more than three times its present population. This approach contrasts with the more laissez-faire style that fuelled Dubai’s astonishing boom and subsequent dramatic (if seemingly fairly brief) bust.
Etihad wants to be known for its quality as much as its size. Mr Hogan says: “Although no airline has ever ramped at the same speed as us, my mandate is not to build the largest airline, but the best in class.” He has made impressive strides in a short time. Etihad has won several international awards for the experience it offers its “guests”, as it likes to call its passengers, and it gives every impression of being a well-run airline that understands what it takes to become a leading brand. What Mr Hogan will not say, however, is whether he is meeting the financial targets set for him by his government shareholder. “I have to make money,” he says, “but the financial crisis and the H1N1 pandemic pushed our break-even out beyond this year.”
According to the always active Gulf rumour mill, Etihad lost $1.2 billion last year and Mr Hogan, under pressure to cut costs, may be looking for a dignified exit, perhaps to become the next director-general of IATA, the airline industry’s trade body. He insists that his deep-pocketed owners are in it for the long haul, but the biggest obstacles in the way of Etihad’s ultimate success are sitting on its own doorstep in the shape of mighty Emirates and the new mega-airport at Jebel Ali.
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