James Hogan
James Hogan will step down as president and CEO of Etihad
Aviation Group during the second half of this year, the Abu Dhabi-based carrier
said Tuesday.
The move comes as Etihad contends with investment losses in
struggling European airlines Air Berlin and Alitalia. It also comes as Etihad
and Gulf competitors Qatar and Emirates have been hurt over the past year by
the soft energy market.
Etihad Aviation Group chairman H.E. Mohamed Mubarak Fadhel
Al Mazrouei said that the carrier "will continue an ongoing, company-wide
strategic review. We must ensure that the airline is the right size and the
right shape."
He added that Etihad must adjust its airline partnerships "even
as we remain committed to the strategy."
During Hogan's 10 years at the helm of Etihad, it grew from
what the company described as a "regional carrier" with a 22-plane
fleet to the 120-aircraft world airline that it is today.
Etihad is also an investor in Air Berlin, Alitalia, India-based
Jet Airways, Air Seychelles, Air Serbia and most recently, the Austrian
low-cost carrier Niki. It's those first
two investments that have proven problematic.
In September, struggling Air Berlin, of which Etihad owns
29.2%, entered into a lease agreement with the Lufthansa Group for up to 40
Airbus A320 aircraft as part of a downsizing and restructuring. Then in
December, Etihad purchased Air Berlin's 49.8% share in Niki for $319 million to
serve as an additional cash infusion for its equity partner. Etihad plans to
use the Niki fleet and network as the foundation for the launch of a new
leisure-focused airline group in April in partnership with European travel
industry conglomerate TUI.
Meanwhile, Alitalia, of which Etihad purchased a 49% stake
in 2014, has been ordered by creditors to develop a cost-saving restructuring
plan by February to stem mounting losses.
On Monday, Alitalia CEO Cramer Ball informed the airline's
board of a plan to save at least 160 million euros for 2017, according to the
Center for Aviation.
Etihad said Monday that the aviation group's CFO, James
Rigney, will also leave the company later this year. A global search is
underway for Hogan and Rigney's replacements.