The appointment of a new permanent chief executive at Etihad Airways has been delayed even further, with sources saying a new boss won’t start at the airline until late 2017. The concern, of course, is that until Etihad gets a new and clear sense of direction there won’t be any movement in cabin crew recruitment.
Earlier this year, the previous CEO, James Hogan was dramatically removed from his position. His sacking came after the airline’s owners tired of his expensive and largely unsuccessful strategy decisions.
Hogan had attempted to build Etihad into a global aviation powerhouse by buying minority stakes in a number of smaller airlines in Europe, the Indian subcontinent and Australia. In effect, Hogan wanted Etihad to preside over the worlds fourth airline alliance – competing against Star Alliance, Oneworld and Skyteam.
The gamble didn’t pay off. Etihad has been forced to spend huge sums of money to keep its airline partners in business and its own financial performance has suffered from the slowdown in the oil market. Once happy passengers lament the demise of what they saw as a luxury, boutique airline.
Of course, Etihad had invested a lot in its own product and it’s still judged as a 5-star airline by Skytrax – but the cracks are starting to show. In recent months Etihad has been forced to make a series of cutbacks to its once generous service.
At the same time, the temporary CEO, Ray Gammell, has admitted that the airline is “doing more with less”. The airline has made some employees redundant and plans to reduce its workforce even further through “natural wastage”. Etihad is most definitely in cost-saving mode.
So what does this mean for the future? Well, initially we had expected Etihad to have a new chief executive and a public position on its strategy by now. At least that’s what Etihad led us to believe. It now looks like we’ll have to wait at least 3 months for any further new.
According to sources within Etihad, the new chief executive has been chosen but speaking with Reuters the source declined to name who this would be. In the meantime, Abu Dhabi has at least signalled part of its plan for the future.
In response to the speculation, a spokesperson for Etihad is reported as saying: “The recruitment of a new Etihad Aviation Group CEO is reaching its conclusion with the successful candidate expected to start no later than the beginning of 2018.”
Not that Etihad has pulled funding from both Alitalia and airberlin, it’s clear that the carrier is no longer going to prop up unsuccessful airline’s that it’s invested in. The future, however, is still unclear. For a start, Etihad is now gearing up to compete head on with both Emirates and Qatar Airways for the same market. Both are much larger airline’s and the premium market still hasn’t recovered.
It looks bad at the moment but Etihad is unlikely to fail. That being said, rumours of a possible merger with Emirates continue to proliferate. The next few months, unfortunately, are unlikely to produce any definitive answers.
