The expansion of Etihad Airways continues, not in direct growth of routes (though there is some of that) but in the addition of more partners where the carrier owns a stake. The most recent airline to be added to the Etihad portfolio is Serbia’s Jat Airways. Etihad reportedly will take a 49% stake in the company and assume operational control in exchange for a $50mm investment. The deal is expected to be formally announced next week and take effect in August.
Jat will be the sixth airline in which Etihad has taken an equity stake. Four have been finalized (Aer Lingus, Air Berlin, Air Seychelles and Virgin Australia) and one (Jet Airways) is still pending. Etihad plans to use its size to help the smaller Jat realize savings in their purchasing and maintenance costs, similar to other partners in the “equity alliance.” Etihad also plans to leverage the regional coverage Jat Airways has to provide connecting service to their daily service between Belgrade and Abu Dhabi. Oh, and Jat Airways has signed an agreement to codeshare with Air Berlin, a deal almost certainly made possible by the fact that both are partially owned by Etihad.
Speaking of partnerships facilitated by Etihad ownership, two other airlines have expanded their relationship. Virgin Australia and Air Berlin are teaming up on both frequent flyer and codeshare operations, mostly centered around the Abu Dhabi hub of Etihad. Virgin Australia-operated flights between Sydney and Abu Dhabi will now carry an Air Berlin code while flights to Dusseldorf and Berlin will carry the VA code. Air Berlin will also see their code on several domestic Australia flights. The frequent flyer reciprocity will allow for earning in either the Velocity or TopBonus programs for flights on both partners.
The tie-up between Air Berlin and Virgin Australia is a particularly interesting one given that the former is a member of the oneworld alliance which also includes Qantas. And yet, rather than work with Qantas on local codeshare flight options, Air Berlin has chosen to partner with Qantas’s largest competitor. Is this yet another example of the weakening of global alliances? Is it “payback” for Qantas partnering with Emirates, a major competitor of Etihad?
One thing is for certain in all of this: The relationships between airlines continue to get more interesting, sometimes even in a good way.
Related Posts:
- Air Berlin sells off Topbonus loyalty program
- How much does the Middle East alliance shake-up matter?
- Emirates, Qantas tie up on Australia service
- Etihad invades Germany, buys controlling interest of airberlin
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The Economist today also had an article where a SkyTeam executive was praising the way Etihad does business vis a vis partnerships with individual airlines as opposed to the alliance model. It does seem that perhaps alliances are [very slowly] on the way out in favor of more direct relationships where the benefit to both airlines is more obvious.