Etihad invades Germany, buys controlling interest of airberlin


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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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, LinkedIn and .

2 Comments

  1. Wouldn’t a controlling interest by definition be greater than 50%?

    I also wonder what aircraft deliveries they are financing, given that AB is downsizing its fleet significantly. Are they removing 20-30 older aircraft while getting new ones?

    1. As the single largest shareholder they can exert quite a bit of control.

      On the fleet front, this investment could see AB change its tune in an effort to become a regional feeder to the Etihad long-haul network rather than just a regional carrier with a couple long-haul planes. With the plan for 40-odd weekly flights to AUH from AB hubs by mid-2012 there is plenty of opportunity to feed that route network.

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