Etihad to Divide Air Berlin in Two?
Mar 20, 2014, 1:50 pm
#1
Used to be 'FTcadence'
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Etihad to Divide Air Berlin in Two?
Air Berlin's annual press conference was cancelled today and that's led some to question if their airline will continue to operate as a single entity, or if Etihad (which owns a 30% stake in Air Berlin) is hoping to see the airline split into 2 divisions.
http://www.businesstraveller.com/new...-berlin-in-two
http://www.businesstraveller.com/new...-berlin-in-two
Mar 20, 2014, 9:10 pm
#4
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No, but probably as a Long Haul Air Berlin and a Short Haul Etihad Regional.
Darwin Airlines in Switzerland cannot remain the only component of Etihad Regional, that would be ridiculously microscopic for a brand with worldwide ambitions.
And that might give Etihad a recognition leg up over rivals Emirates and Qatar...
Darwin Airlines in Switzerland cannot remain the only component of Etihad Regional, that would be ridiculously microscopic for a brand with worldwide ambitions.
And that might give Etihad a recognition leg up over rivals Emirates and Qatar...
Mar 21, 2014, 12:14 am
#6
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This would seem like a bad business plan. It would probably work for the short-haul aspect of things. But not for the long-haul side. AB only has around a dozen 332s. And although they could acquire more (as they have in the past couple of years), that is hardly enough market presence to make an impact, especially compared to their main rival Lufthansa. And while Lufthansa is outsourcing their non-hub-to-non-hub flights over to Germanwings, they are still keeping the LH brand on all of the flights to/from their long-haul flights.
Mar 21, 2014, 2:47 am
#8
Moderator, SkyTeam and Germany
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I wonder what business sense they see behind two AB's - one for connections to AUH and one for the rest of the network. I hope it's not to keep the one aspect that is important for Etihad and close down the rest of the operations if not profitable soon.
Mar 21, 2014, 3:09 am
#9
Join Date: Dec 2013
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As I see it, part of the problem is that EY does not want to go above 30% ownership of AB because that would trigger the German law that forces them to automatically make a buy-out offer to remaining shareholders. If that happens then they would likely run into EU airline ownership restrictions, all of which could get very messy. By doing creative accounting gymnastics and splitting into 2, EY could pump cash in while not crossing 30%. How the related rumour of stock delisting comes into play is not clear to me at the moment.
Mar 21, 2014, 4:12 am
#10
Join Date: Dec 2013
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Norwegian involved?
New rumor, sorry I could only find a German link:
http://www.aktiencheck.de/exklusiv/A..._Busch-5593133
According to this, Airberlin would be split as rumored. Etihad would "take" the long haul routes to AUH, while Norwegian would buy/invest/other in the European and presumably TATL business. I wonder what that would mean for OW membership.
An alternative story in the radio is that Etihad is going to wrap all of their shares in airberlin, Alitalia, Darwin, and others into one big airline holding and presumably pump cash into that.
http://www.aktiencheck.de/exklusiv/A..._Busch-5593133
According to this, Airberlin would be split as rumored. Etihad would "take" the long haul routes to AUH, while Norwegian would buy/invest/other in the European and presumably TATL business. I wonder what that would mean for OW membership.
An alternative story in the radio is that Etihad is going to wrap all of their shares in airberlin, Alitalia, Darwin, and others into one big airline holding and presumably pump cash into that.
Mar 21, 2014, 8:10 am
#12
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Let us be serious... How relevant is AB to Oneworld and who has used it satisfactorily for its OW affiliation ? The point to point lines are too few and the connections frequencies and schedules are both irregular and unreliable. In addition, anybody checking luggage does so at their own risk. I have given up on them.
Mar 21, 2014, 12:29 pm
#13
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Mar 23, 2014, 2:35 am
#14
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Any long haul airline that has to live off cast-off pro-rates to Bangkok and Phuket does not have a bright future. Although EY does have a wide network, the most popular are to price-sensitive diaspora or leisure markets (India, Thailand, Pakistan, Philippines). EY's top connecting markets from FRA and MUC reinforces this view.
AUH is such a small local market for airlines that any airline co-operating with EY will have to live on shared revenues. I doubt those revenues will cover the cost of flying to AUH from TXL, for example.
AUH is such a small local market for airlines that any airline co-operating with EY will have to live on shared revenues. I doubt those revenues will cover the cost of flying to AUH from TXL, for example.
Mar 23, 2014, 7:59 am
#15
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add another reader who needed to clean their desk and screen from drink residue splashed everywhere after a laughing fit 
Here's a Reuters report on the "EY stocking up its stake in AB to 49.9% and bundling it with AZ and all other subsidiaries and affiliates into one holding company" - I think that's indeed a plausible scenario.
http://uk.reuters.com/article/2014/0...A2L04A20140322
Hopefully whatever happens will leave the route network and the OW membership intact. If not for AB, I'd either have to connect through LON for everything on BA, which is time-consuming and expensive, have to take LCCs (mostly EZY) and live with their limitations or go back to LH/LX. None of these options is particularly attractive.
Here's a Reuters report on the "EY stocking up its stake in AB to 49.9% and bundling it with AZ and all other subsidiaries and affiliates into one holding company" - I think that's indeed a plausible scenario.
http://uk.reuters.com/article/2014/0...A2L04A20140322
Hopefully whatever happens will leave the route network and the OW membership intact. If not for AB, I'd either have to connect through LON for everything on BA, which is time-consuming and expensive, have to take LCCs (mostly EZY) and live with their limitations or go back to LH/LX. None of these options is particularly attractive.