Etihad exec: Restructuring Should Secure Post-COVID Future
Etihad Airways believes its restructuring measures, which had been implemented before the COVID-19 pandemic hit earlier this year, will help the Abu Dhabi-based carrier return to full operations faster.
Many hub carriers are facing challenges as the crisis continues, as long-haul markets are predicted to recover more slowly. In pre-COVID times, Etihad Airways, which has no domestic market but a network with many long-haul routes, normally handled 60% of traffic as transit passengers through its Abu Dhabi International Airport hub.
Restarting hub operations is expensive and challenging for the carrier. “For us, we are in a pretty unique and fortunate position, because over the last two to three years, we made some sizable adjustments—revising our network, revising our fleet strategy—to make sure we have the right aircraft operating on the right route to make money,” Etihad Airways VP-Americas Vincent Frascogna told ATW.
“We had already been in the gym, we are pretty fit, which allows us to adjust quickly. Etihad is a far more efficient airline now regarding our network and fleets,” he said.
However, the carrier must still make changes, for example, when it comes to cost base, manpower and further fleet developments.
He said Etihad remains committed to restarting Airbus A380 operations on the right routes; it has 10 of the type. But now the Boeing 787-9 is the right-sized aircraft. “When borders begin to reopen, then it makes sense to operate larger aircraft,” he said. “But if something is not working, we will adjust where it is necessary.”
Etihad plans to operate 60 to 65 routes in September, which should cover most key markets, especially Europe, which includes a double-daily service to London, Paris or Frankfurt, among others. Its Asia network should be expanded again and Frascogna hopes to increase Etihad’s presence in China. “In pre-COVID times, Etihad operated over 100 routes,” he said. Australia is one of the top destinations for travelers out of Europe, but the border closure in Down Under continues, impacting Etihad’s operations. But we will be able to restore quickly when markets open.”
Asked which role Etihad should play in the future Gulf region, which is dominated by three carriers—Emirates Airline, Qatar Airways and Etihad—Frascogna sees a fair share for the Abu Dhabi flag carrier. “We are competitors, but we all promote travel via our region. When we do this successfully, that helps each airline as well,” Frascogna said.
Air Arabia Abu Dhabi
Air Arabia Abu Dhabi—the joint venture between the Abu Dhabi government and LCC Air Arabia—should be a complementary addition to the Etihad network, he said. The LCC should offer a wider range to secondary cities where Etihad would ordinarily not operate, and yields are maybe too low. “I think that we will probably see it complement our long-haul routes with routes that have not been served.” Frascogna does not believe Air Arabia Abu Dhabi will cannibalize Etihad’s own network where it operates Airbus A320/321s.
He strongly believes in the Abu Dhabi hub. “It will remain as a 100% hub, if not stronger,” he said. “The consumer is looking not only to fly on a safe airline, it is the whole process. Abu Dhabi and the UAE will strongly rebound when things return to normal,” Frascogna said.