Australian James Hogan is to stand down as head of the Etihad Airways group, the company said Tuesday, as the Abu Dhabi-based carrier struggles with investments in European airlines. After piloting the state-owned Gulf airline through more than a decade of growth, Hogan will leave his post in the second half of 2017, Etihad Aviation Group said in a statement.
Hogan was the architect of a strategy that saw Etihad buy significant stakes and make major investments in other airlines, notably Air Berlin and the long-struggling Alitalia. But Etihad Aviation Group chairman Mohamed al-Mazrouei said it was time for a company-wide review, following continued cash injections into Etihad's partners. "We must progress and adjust our airline equity partnerships even as we remain committed to the strategy," Mazrouei said in the statement.
"We must ensure that the airline is the right size and the right shape." Hogan's approach was in stark contrast to the strategies of fellow Gulf airlines Emirates, based in Dubai, and Qatar Airways, which instead invested in developing their own services. It saw Etihad spend hundreds of millions on stakes in foreign airlines, including acquisitions of 49 percent of Alitalia, 29 percent of Air Berlin, 19.9 percent of Virgin Australia and three percent of Irish carrier Aer Lingus that it offloaded in 2015.
Etihad also acquired 40 percent of Air Seychelles, 24 percent of India's Jet Airways and 49 percent of Air Serbia. Some of the investments have been costly, however, with Etihad keeping Air Berlin alive with regular cash injections in recent years. The German carrier suffered a record loss of 447 million euros ($480 million) in 2015. Etihad's management of Alitalia has also been criticised over fears of up to 1,600 jobs being cut at the Italian carrier, which was rescued from bankruptcy by the Abu Dhabi company in 2014.
"One could speculate that the two weak EU airlines marred his strategy. But I don't think we can blame him for this," argued Addison Schonland, an aviation expert with US-based consultancy AirInsight, adding that the expansion must have had a green light from decision-makers in the emirate.
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