Etihad Airways - Biggest Single Stakeholder in Air Berlin

Etihad Airways of Abu Dhabi and German airline, Air Berlin has announced a strategic deal making Etihad Air Berlin’s biggest stakeholder with access to new European networks as it seeks to maintain pace with its major opponent, Emirates.

The fast-growing Gulf airline, Etihad Airways has accomplished its goal of expanding in Europe by becoming the biggest stakeholder in Air Berlin, a key German carrier. Etihad Airways, which earlier only had less than 3 percent stake in Air Berlin has now boosted it to 29 percent.

As per the deal announced on Monday, Etihad Airways will give approx $255 million (£162 million) of funds for the fleet development and network expansion at Air Berlin and in return will take two seats on the board of Directors of Air Berlin.

Moreover, the deal also includes a code share agreement that will grant Etihad access to Air Berlin’s European short-distance network, and to the German capital of Berlin.

“The strategic partnership with Etihad Airways opens up enormous opportunities for the future of our company.” Air Berlin CEO, Hartmut Mehdorn said.

Etihad Airways’ Chief Executive Officer James Hogan welcomed this deal and said, “This new partnership expands our network reach, gives us access to 33 million new passengers, and provides us with a real opportunity for global growth. Through Air Berlin, we gain immediate access to a broad and complementary European market, with outstanding connectivity options for customers of both airlines.”

Moreover, the German carrier has also decided to move its Middle East operation from Dubai to Abu Dhabi and will offer flights to Abu Dhabi from Berlin four times a week. This deal will possibly be very rewarding for the budget-oriented European travellers seeking cheap flight tickets to travel to Abu Dhabi.

Further, as per the agreement, Air Berlin will initially serve four A330-200 flights between Berlin and Abu Dhabi per week from January 15, 2012, which will enable the European travellers to access 29 flights per week between Abu Dhabi and four German hubs. This frequency can go as high as 42 flights from mid April.

Every year millions of Europeans book tickets for flights to Abu Dhabi and land at the city’s airport to experience blissful holidays. The agreement between the second largest airline of Germany and the flag carriers of UAE has raised the chances of these travellers being able to net cheap flight tickets.

For maintaining the cost efficiencies across the two companies, both the airlines have planned to create a combined procurement panel to handle areas like fleet procurement and operation, maintenance, repair and overhaul (MRO) and other general procurements.

Hartmut Mehdorn was quoted in online reports as saying: “This partnership opens enormous opportunities. Abu Dhabi will become our new gateway to Asia and Australia.”

James Hogan showed his contentment with the agreement and referred it as the most important one in the history of Etihad Airways.

With the agreement, Etihad Airways has raised its stake in Air Berlin from 2.99 percent to 29.2 percent followed by ESAS, Pegasus Airlines’ parent company.

Reference

Etihad Airways Orders 10 Boeing 787-9s and Two 777 Freighters

On Monday, the Etihad Airways announced that it would place an order for 10 787-9 Dreamliners and two Boeing 777 Freighters. This deal of worth $2.8 billion approx has made the airline the world's biggest Dreamliner consumer.

Being two of the most fuel-efficient aircraft in the world, Boeing 787 Dreamliner and 777 have gained much popularity in the world of air travel. With the purchase of 10 787-9 Dreamliners and two Boeing 777 Freighters, Etihad Airways is hoping that this deal would speed up the company's growth as it has been flourishing quickly since the beginning of year 2003.

The flag airline of UAE, Etihad Airways is one of the fastest-growing airlines in the world. The airline operates flights to almost 70 destinations in nearly 50 countries. The airline may not be highly popular for selling tickets on cheap flights to UAE or other destinations yet stay on the top of the preference list of millions of travellers due to its premium facilities and services. Now, with airline’s decision to purchase 10 787-9 Dreamliners, which are 20 percent extra fuel efficient, the airline is expected to reduce its operating cost and pass on the benefit to travellers in the form of cheap tickets.

If not all airline routes, travellers booking on 787 routes to and from Abu Dhabi are likely to net cheap flights to UAE and save on holiday trips to tour the country.

Abu Dhabi Airport is the hub for Etihad and with cheaper tickets, the already sought after city will also become a preferred port of entry for those planning to travel to UAE.

The first commercial debut of the 787 Dreamliner was originally scheduled for 2008 but took place only this October. Due to such an extended hold-up in the production, many airlines have reportedly withdrawn their orders Boeing.