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Whatever Happened to Etihad Airways Partners?

In 2014, Etihad Airways created their own alliance – Etihad Airways Partners – to encourage more loyal flyers to use carriers in their network. Nearly four years later, the alliance is all but gone due to the shuttering of Air Berlin. Is the Etihad Airways Partners gone? And what does it mean for other carriers?

If you are a frequent flyer, you already know about the three major airline alliances – oneworld, SkyTeam and Star Alliance – and their strengths and weaknesses around the world. But unless you fly to Europe, the Middle East or Asia often, you may not know about the fourth airline alliance that almost was: Etihad Airways Partners.

In 2014, Etihad Airways announced a new alliance with six charter members: Air Berlin, Air Serbia, Air Seychelles, Darwin Airline and Jet Airways. What made this alliance unique was the fact that Etihad had a financial interest in three of them. The Middle East carrier owned a significant portion of Air Berlin, Air Serbia, Air Seychelles, and currently holds a 24 percent interest in Jet Airways. What was even more curious is that despite having an interest in Alitalia or Virgin Australia, the carriers were not included in the partnership.

Another thing that made the partnership unique is that members of this alliance kept their allegiance to their other major partners. Air Berlin were members of the oneworld alliance along with Etihad Airways Partners during their tenure inside the partnership.

Three years in, cracks began to surface in the polished façade of the partnership. In August 2017, Air Berlin went into bankruptcy, which ultimately led to its insolvency. One month later, Etihad announced changes to their loyalty program, Etihad Guest, which reduced the number of partners for which flyers could get a first-time flight miles bonus.

Today, Etihad Airways Partners is little more than a badge on several different websites. Air Berlin is no longer flying, but their American website still has a page dedicated to the partnership. Darwin Airline – operating under the brand names Adria Airways Switzerland and Etihad Regional – shut down at the end of 2017 after Etihad sold their stake in the carrier. Air Serbia, Air Seychelles and Jet Airways all display the Etihad Airways Partners logo on their website, but don’t go anywhere. Even the Etihad Airways website is devoid of any information on the partnership, but instead directs flyers to a page about their multiple partnerships around the world.

What went wrong with Etihad Airways Partnership? Between a limited regional network and no partners outside of the carrier’s financial interests, the group that was supposed to break from the “fractured” nature of global airline alliances never had the true reach to grow. Without support in other parts of the world, a limited presence in North America and limited benefits across their partners, the partnership ended up more fractured than any major alliance could have been. It appears that, despite the best intentions of Etihad, the alliance was never meant to launch in the first place. Instead of an alliance, the “partnership” turned out to be little more than a glorified way to encourage regular Etihad passengers to fly with their invested airlines.

While we may never see a true fourth airline alliance rise, it isn’t stopping airlines from building out their networks through partnerships. Alaska Airlines has one of the biggest of these, with Alaska Airlines Mileage Plan miles usable for many of the partner carriers. If anyone has the best chance of building another alliance – and succeeding at it – it could be the Mileage Plan partners.

[Photo: Shutterstock]

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Tr60 January 23, 2018

Same strategy as Swiss Air many years ago when it comes to buying minority shares in airlines. Swiss Air bought minorities shares in a bunch of ailrines and ended up bankrupt! I wonder if McKinsey is advising also Etihad! Chances are that Etihad would have filed for bankrupcy if it was not backed by Abu Dhabi government. James Hogan, the Ex- CEO of Etihad, would have had two failures on his had: first Gulf Air where he was a CEO too and now Etihad. Sad to see so much money wasted!