Etihad has purchased a 29.21% stake in German airline airberlin, becoming the single largest shareholder and taking two seats on the board. The move is not surprising – outside investment in the struggling carrier has been expected for some months now – while the full impact remains to be seen. Perhaps the most significant immediate aspect of the partnership is that Etihad has committed $255MM to ensure aircraft deliveries in the near term.
Among other effects of the move, airberlin will be shifting their Middle East connectivity (only 4x weekly) from Dubai to Abu Dhabi to link up with the Etihad hub there. That’s a drop in the bucket compared to the 25+ flights that Etihad operates to Germany each week from their hub, but it does shift the market a bit. The two carriers plan extensive code-sharing across their networks initially with hopes of receiving anti-trust immunity in the near future.
The two carriers will also be aligning their loyalty programs, permitting earning and burning across carriers and reciprocal elite recognition and earning.
Finally, the two intend to investigate joint procurement opportunities to reduce costs in fleet deployment and procurement, MRO and other functions.
Gaining access to the German market has been something of a challenge for the middle-eastern carriers and Lufthansa has expended a lot of energy protecting the market from Emirates, Etihad and others. This investment shakes up those efforts quite a bit.
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