The “Big Three” Persian Gulf carriers—Emirates, Qatar Airways and Etihad Airways—are increasingly heading in different directions and distinguishing their strategies. Etihad has created the first part of its “Etihad Regional” system; Qatar is venturing into Saudi Arabia with a new affiliate airline, while Emirates remains a purely widebody hub-and-spoke carrier.

To extend its footprint quickly, Etihad has picked up minority stakes in Virgin Australia, Air Berlin, Jet Airways and Air Seychelles; it may soon add a stake in Alitalia, too. But its latest idea is Etihad Regional, following a deal to acquire a 33.3% share in Swiss regional carrier Darwin Airline for an undisclosed sum, although it has not yet been cleared by regulatory authorities. Even with the Etihad stake, Darwin would be majority-controlled by Swiss nationals, as Etihad Chief Commercial Officer Peter Baumgartner is a Swiss national and will sit on the Darwin board. Etihad is hoping to finalize the purchase in the coming weeks.

The first Darwin aircraft featuring the Etihad Regional livery started operating between Lugano and Geneva Jan. 17. By the end of June, Darwin's entire fleet of 10 Saab 2000 aircraft will fly with the new livery and have new interiors. The cabin, which Hogan says has the “best specs of any regional airline in Europe,” is fitted with 50 leather seats, all at the same pitch, but this could change in the future. “We're looking at the possibilities,” Baumgartner says. Crews have new uniforms and service standards will be in line with Etihad's.

Darwin will expand its network to 34 destinations, from 15, by June. It will feed into seven European gateways served by Etihad Airways: Geneva, Amsterdam, Paris, Dusseldorf, Belgrade, Zurich (commencing in June) and Rome (commencing in July). And it will connect with Air Berlin in Berlin, Dusseldorf and Zurich, providing onward connectivity to destinations in Europe and North America.

To support the new routes, Darwin plans to add four turboprops, either ATRs or Bombardier Q400s. Hogan says the analysis of the acquisitions is taking into account the airline's network needs as well as synergies for crew training; maintenance, repair and overhaul; and spare parts commonality with other Etihad equity partners.

Air Berlin, in which Etihad has a 29% stake, operates 76-seat Q400s, while Air Serbia has five ATR 72s, according to the Aviation Week Intelligence Network Commercial Aviation Fleet database.

Additional fleet growth is foreseen, but Etihad CEO James Hogan notes that he wants to “first bring the airline back to profitability.” He aims to achieve that goal by the end of this year.

Darwin will probably not remain the only member of the new regional scheme. Several airlines are interested in operating as Etihad Regional affiliates, Hogan says. “We received inquiries from operators in Southeast Asia and Africa. If it makes sense and the airline meets the criteria, we are ready to explore the possibility, but no discussions are currently ongoing to expand the new concept and brand,” Hogan tells Aviation Week.

There are also no plans to rebrand other current Etihad equity partners to Etihad Regional, he says, pointing out that Darwin “wasn't a well-known name,” while all of the other equity partners, such as Air Berlin, have established brands.

It would seem that Jet Airways might be a perfect candidate to fly under the Etihad Regional banner, but the airline is being rebranded as Air Serbia. “Air Serbia and Air Seychelles are national carriers. They retain their own logo and livery,” Hogan says. Etihad is concluding the acquisition of a 49% stake of Air Serbia and awaiting regulatory approval from the European Commission for the airline's restructuring and a capital increase.

Qatar Airways, meanwhile, is firming up plans for the new affiliate in Saudi Arabia, Al Maha. CEO Akbar Al Baker says the carrier is likely to launch operations in the third quarter with bases in Riyadh and Jeddah. Qatar will provide the necessary aircraft, initially a fleet of about 10 aircraft; it has outstanding orders for 36 Airbus A320s and 21 A321s, some of which could be moved to the new operation.

Qatar last year won one of two licenses made available by the Saudi government for new airlines. So far only Saudi Arabian Airlines (Saudia) and Flynas (formerly NAS Air) have been allowed to operate on domestic routes. Saudi Arabia has a price cap on domestic flights and is also subsidizing fuel, but the government is slowly liberalizing the market. Al Baker says Qatar Airways and the government have reached a compromise on these matters ahead of the formal decision to launch Al Maha. Regulation has been a high barrier to entry for new airlines and contributed to the 2010 demise of domestic low-fare carrier Sama.

The second of the two new licenses has been awarded to Saudi Gulf airlines, a subsidiary of the Dammam-based Al Qahtani group of companies. Saudi Gulf has ordered up to 26 Bombardier CS300s, the stretched version of the new CSeries that will become available in 2016 at the earliest. Since Saudi Gulf plans to launch operations in October 2015, it will have to find interim lift. Saudi Gulf is run by Samer Majali, formerly CEO of Royal Jordanian Airlines and Gulf Air.