The shoe has dropped, the CEO of Etihad Airways is on his way out. Just last month, when I was on vacation, news broke out that Etihad’s CEO James Hogan would be on his way out within 3 months. While he has been CEO for over 11 years, and was recently elevated to CEO of the group, it seemed his strategy did not work as expected.
James Hogan convinced the owners of Etihad about an equity-led strategy where they would invest in airlines around the world and get them to be strategic partners and divert long haul traffic to come through Abu Dhabi and on EY planes. Seems far fetched and it may have worked for a while. And on the basis of that, Etihad invested tonnes of money (100s of millions of dollars), in various carriers around the world:
- Air Berlin
- Jet Airways
- Air Seychelles
- Air Serbia
to name a few. They even launched the Etihad Airways Partner alliance as the fourth alliance last year, with different standing principles as compared to the conventional airline alliances such as Star, oneworld and SkyTeam.
Now, it turns out his strategy did not completely work and that may be the reason he is on his way out. The alliance with European carriers is the biggest part of this perhaps, where Etihad has been unable to turn around the failing carriers in spite of putting in tonnes of money. Alitalia is failing still, and Air Berlin is almost handed over to Lufthansa and a talk about an amalgamation between Lufthansa & Etihad emerged as well.
Today, it has been announced that James Hogan will indeed leave the airline, along with group CFO James Rigney later this year.
— Tarun Shukla (@shukla_tarun) January 24, 2017
Etihad commences search for new CEO and CFO. James Hogan and James Rigney will leave in 2H2017.
— Will Horton (@winglets747) January 24, 2017
It would be interesting to see how these turbulent times play out in the Middle-East. Emirates is allowing paid lounge access, Etihad is firing their CEO. Hmm.
I wonder what becomes of the investments already made? Jet Airways literally got saved from a sinking ship due to Etihad’s investment but now is driving its own strategy so not really sure how will the new CEO herd together 8 carriers.
What do you think of what will be Etihad’s new strategy? Or will they quietly merge with Lufthansa in the days ahead?