Etihad Heads Off Trump Tensions With Pledge Not to Grow in U.S.
#1
Original Poster
Join Date: Oct 2010
Posts: 2,094
Etihad Heads Off Trump Tensions With Pledge Not to Grow in U.S.
Etihad Airways PJSC sought to head off the prospect of further clashes over its U.S. expansion now that Donald Trump is president, saying it has no plans to add destinations beyond those already served.
https://www.bloomberg.com/news/artic...to-grow-in-u-s
https://www.bloomberg.com/news/artic...to-grow-in-u-s
#2
Suspended
Join Date: Jul 2001
Location: Watchlisted by the prejudiced, en route to purgatory
Programs: Just Say No to Fleecing and Blacklisting
Posts: 102,103
Can't say I'm surprised. The UAE can't afford to do all what it was doing before for all of its aviation industry, so this is just another public play up on the advice of its lobbyists in DC. And given the US bans -- we probably haven't seen them all yet -- and all the uncertainty being unleashed by the new US Admin, demand for travel on the GCC3's route network won't be all that it otherwise would be. Add in that the UAE is in major kiss-up mode (and has always preferred the current US party in charge to its primary opposition), and, voila, we get this kind of stuff too.
Economic realities and political realities combine to make the international air travel world what it is. Hogan pretty much indicated that this announcement is not driven by merely apolitical calculations.
Economic realities and political realities combine to make the international air travel world what it is. Hogan pretty much indicated that this announcement is not driven by merely apolitical calculations.
Last edited by GUWonder; Feb 3, 2017 at 1:43 am
#4
FlyerTalk Evangelist
Join Date: Mar 2008
Location: Netherlands
Programs: KL Platinum; A3 Gold
Posts: 28,550
Eithad is going through the first rough patch in its short history. For the first time ever - or at least in a long time - it has reduced the number of destinations it is flying to. It needs to take a pause and get its house in order - particularly as its own core business is now in trouble, together with the fact that it's been distracted for the last several years trying to resusciate both airberlin and Alitalia.
Of course, it is no bad thing NOT to antagonise Trump by launching new services right now. But Etihad is in uncharted territory at the moment.
#5
Suspended
Join Date: Jul 2001
Location: Watchlisted by the prejudiced, en route to purgatory
Programs: Just Say No to Fleecing and Blacklisting
Posts: 102,103
The timing might suggest so, but I really don't think this has anything to do with Trump.
Eithad is going through the first rough patch in its short history. For the first time ever - or at least in a long time - it has reduced the number of destinations it is flying to. It needs to take a pause and get its house in order - particularly as its own core business is now in trouble, together with the fact that it's been distracted for the last several years trying to resusciate both airberlin and Alitalia.
Of course, it is no bad thing NOT to antagonise Trump by launching new services right now. But Etihad is in uncharted territory at the moment.
Eithad is going through the first rough patch in its short history. For the first time ever - or at least in a long time - it has reduced the number of destinations it is flying to. It needs to take a pause and get its house in order - particularly as its own core business is now in trouble, together with the fact that it's been distracted for the last several years trying to resusciate both airberlin and Alitalia.
Of course, it is no bad thing NOT to antagonise Trump by launching new services right now. But Etihad is in uncharted territory at the moment.
But EY is under pressure too from the economics of the business and its "investments" that didn't work out so well.
Last edited by GUWonder; Feb 3, 2017 at 2:12 am
#6
Join Date: Jun 2015
Posts: 1,481
The timing might suggest so, but I really don't think this has anything to do with Trump.
Eithad is going through the first rough patch in its short history. For the first time ever - or at least in a long time - it has reduced the number of destinations it is flying to. It needs to take a pause and get its house in order - particularly as its own core business is now in trouble, together with the fact that it's been distracted for the last several years trying to resusciate both airberlin and Alitalia.
Of course, it is no bad thing NOT to antagonise Trump by launching new services right now. But Etihad is in uncharted territory at the moment.
Eithad is going through the first rough patch in its short history. For the first time ever - or at least in a long time - it has reduced the number of destinations it is flying to. It needs to take a pause and get its house in order - particularly as its own core business is now in trouble, together with the fact that it's been distracted for the last several years trying to resusciate both airberlin and Alitalia.
Of course, it is no bad thing NOT to antagonise Trump by launching new services right now. But Etihad is in uncharted territory at the moment.
- the US economic will decrease on mid- and long-term. Less economic means less passengers.
- even if the UAE are not concerned by the ban (yet), it will effect the business.
- AA, UA and Delta want to stop the subsidies for EY. With Trump and "America first", they have better chances to get heard by the US government.
- the meaning of China as a reliable trading partner will increase, so there is a good alternative for investments (Africa is the second one).
#7
FlyerTalk Evangelist
Join Date: Mar 2008
Location: Netherlands
Programs: KL Platinum; A3 Gold
Posts: 28,550
This is exactly what Hogan said:
Originally Posted by Bloomberg
“We are not flying into any further points in the U.S.A.,” Etihad Aviation Group Chief Executive Officer James Hogan said Wednesday in an interview with Bloomberg Television. “We are very comfortable with our American network.”
He also said that he stood by his investment strategy, but you can be sure that the airline will seek to exit as many of these as possible as soon as possible after he has gone.
Besides - this shouldn't have come as news.
Originally Posted by CAPA
For the first time in over a decade, a Gulf superconnector airline will reduce its annual capacity. Etihad is forecast to cut ASKs by 4% in 2017. Emirates and Qatar Airways will have their slowest growth expansion in a decade, but in terms of net capacity addition 2017's production increase is the slowest in about five years.
Etihad is contracting in all regions except Western Europe and Australia in 2017. The largest cuts will be in South America, North America and Southeast Asia, although this does not necessarily correlate to regional profitability. Despite the reduction Etihad's frequencies will be up 1% in 2017, mostly in Western Europe and South Asia.
Etihad is contracting in all regions except Western Europe and Australia in 2017. The largest cuts will be in South America, North America and Southeast Asia, although this does not necessarily correlate to regional profitability. Despite the reduction Etihad's frequencies will be up 1% in 2017, mostly in Western Europe and South Asia.
It probably suits the airline to have people think "oh, they are pausing their growth because of Trump" - but there is no reason to think this is the main reason. Qatar announced service to Las Vegas after the election, and confirmed the date a few weeks ago. Emirates announced service to Newark - via Athens, Greece 2 weeks ago.
The real reason behind Etihad's pause has far more to do with their current financial problems.
The fact that their own business is in trouble - with restructuring, job cuts, network shrinkage and the CEO and CFO leaving the company means that there are - as shown above - no immediate plans for growth.
#8
FlyerTalk Evangelist
Join Date: Mar 2008
Location: Netherlands
Programs: KL Platinum; A3 Gold
Posts: 28,550
There are four reasons, why Trump is the main reason for EY's decision:
- the US economic will decrease on mid- and long-term. Less economic means less passengers.
- even if the UAE are not concerned by the ban (yet), it will effect the business.
- AA, UA and Delta want to stop the subsidies for EY. With Trump and "America first", they have better chances to get heard by the US government.
- the meaning of China as a reliable trading partner will increase, so there is a good alternative for investments (Africa is the second one).
- the US economic will decrease on mid- and long-term. Less economic means less passengers.
- even if the UAE are not concerned by the ban (yet), it will effect the business.
- AA, UA and Delta want to stop the subsidies for EY. With Trump and "America first", they have better chances to get heard by the US government.
- the meaning of China as a reliable trading partner will increase, so there is a good alternative for investments (Africa is the second one).
However, Etihad is currently grappling with - and responding to - immediate, ongoing and far more threatening problems in its current operations.
Originally Posted by Forbes
According to a spokesperson for the airline, it is embarking on a restructuring exercise to cut costs and improve productivity “against a backdrop of weakened global economic conditions”. The airline hasn’t said how many jobs will go, but it has described it as “a measured reduction of headcount in some parts of the business.”
The most recent figures from the airline show a slight reduction in the number of destinations it flies to, from 116 at the end of last year to 112 in October this year. Growth in its fleet has almost stalled in 2016, with the number of planes rising by just one over the first ten months of the year to 122.
The announcement of job cuts comes in the wake of falling passenger numbers at Eithad’s Abu Dhabi base. Other warning signs in recent weeks have included huge losses announced by its Dubai-based rival Emirates.
#10
FlyerTalk Evangelist
Join Date: Mar 2008
Location: Netherlands
Programs: KL Platinum; A3 Gold
Posts: 28,550
But they are certainly paused for 2017.
Originally Posted by CAPA
For the first time in over a decade, a Gulf superconnector airline will reduce its annual capacity. Etihad is forecast to cut ASKs by 4% in 2017. Emirates and Qatar Airways will have their slowest growth expansion in a decade, but in terms of net capacity addition 2017's production increase is the slowest in about five years.
Etihad is contracting in all regions except Western Europe and Australia in 2017. The largest cuts will be in South America, North America and Southeast Asia, although this does not necessarily correlate to regional profitability. Despite the reduction Etihad's frequencies will be up 1% in 2017, mostly in Western Europe and South Asia.
Etihad is contracting in all regions except Western Europe and Australia in 2017. The largest cuts will be in South America, North America and Southeast Asia, although this does not necessarily correlate to regional profitability. Despite the reduction Etihad's frequencies will be up 1% in 2017, mostly in Western Europe and South Asia.
It's not at all that Trump is causing them to put any potential growth they were planning into other regions. They are simply not planning on growing at all in 2017. Even if had been a Clinton administration, which with its first act tossed out the "Airlines For America" claims and rolled out the red carpet for the Middle Eastern Airlines, Etihad is not currently in a position where it would likely have been able to add US capacity.
#11
Join Date: Jun 2015
Posts: 1,481
In your quote I can find Western Europe, Australia, South America, North America, Southeast Asia and South Asia.
For you it's a prove about something about China and Africa. Interesting.
Btw: I thought, that Trump is ellected for at least four years. You focus on 2017. Do you have any breaking news about that, you like to share?
For you it's a prove about something about China and Africa. Interesting.
Btw: I thought, that Trump is ellected for at least four years. You focus on 2017. Do you have any breaking news about that, you like to share?
#12
FlyerTalk Evangelist
Join Date: Mar 2008
Location: Netherlands
Programs: KL Platinum; A3 Gold
Posts: 28,550
Neither China nor Africa are in Western Europe or Australia.
Anything planned for 2018, 2019 or 2020 is, for now, merely provisional. Market forces, aircraft deliveries, and many other factors can affect plans so they are not made that far in advance.