The President and Chief Executive Officer of Etihad Airways, James Hogan, urged Europe’s governments and airlines to embrace external investment to help strengthen the aviation sector.
Speaking in Vienna at a European Union conference on air transport competitiveness in Europe, Mr Hogan, said, “Aviation was a global, not regional, industry, generating strong economic and social benefits.”
He said his airline wanted to engage with Europe for mutual gain.
“Consolidation of airlines is critical to sustainable air services,” Mr Hogan said. “External investment is not a threat. It is an opportunity to strengthen airlines, and to support employment and economic growth,” he added.
Etihad Airways has acquired minority stakes in three European airlines – airberlin (29.2%), Aer Lingus (4.99%) and Air Serbia (49%), and is finalising the acquisition of a 33.3% stake in the Swiss regional carrier Darwin Airline, which operates as Etihad Regional. Etihad Airways has also announced its intention to acquire a 49% stake in Italy’s Alitalia, subject to regulatory approval.
Mr Hogan said, “Middle Eastern airlines were coming under increasing scrutiny in Europe, as opponents cited the expansion of Gulf carriers as a major competitive threat. All Gulf carriers are not the same.” “We are different sizes, have different hubs and follow different strategies. We are actually vigorous competitors with each other,” he added.
He said, “Etihad Airways, in particular, had become a major focus of larger competitors who feared and opposed its investment strategy. Etihad Airways is wholly-owned by the Government of Abu Dhabi. We received start-up capital, like every airline does, but we receive no state subsidies, no free fuel and no reduced airport charges in the United Arab Emirates.”
Mr Hogan said, “The European airline industry was built upon decades of government ownership and support, and that even after privatisation or part-privatisation, government bailouts, debt waivers and various forms of subsidies had continued.”
He cited examples of direct state aid totalling €14.2bn, including an €800m payment by the German Government to Lufthansa to support a pension fund gap, state aid of €1.1bn for SWISS following the collapse of its predecessor, Swissair, and the Austrian Government’s absorption of €500m of debt accrued by Austrian Airlines. Both airlines are now subsidiaries of Lufthansa.
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