Etihad Airways has created a new airline alliance with five other airlines that will coordinate their networks, schedules and frequent flyer benefits under the name Etihad Airways Partners.
In addition to Etihad, the initial partnership members are Airberlin, Air Serbia, Air Seychelles, India's Jet Airways and the Swiss regional carrier Darwin Airline. Etihad said that any airline can join the group, even if they already belong to an existing alliance. Airberlin, for example, belongs to Oneworld.
"We are broadening our business model to articulate and define a partner proposition for like-minded airlines which will result in synergies and efficiencies for participating airlines on the one side and enhanced network choice, service and frequent flyer benefits for the consumer on the other," said James Hogan, president and CEO of Etihad Airways.
Abu Dhabi-based Etihad is putting its own logo on the new partnership; it will be displayed on aircraft and on branded materials for the alliance.
The partnership will provide standardized mileage and benefits to the frequent flyer members of all participating airlines.
Members will also share sales teams in some destinations, share pilot and crew training, jointly procure services and supplies and other efforts to get the benefits of economies of scale.
Etihad has equity in four of the airlines in the partnership: Airberlin, Air Serbia, Air Seychelles and Jet Airways (it also has equity in Aer Lingus and Virgin Australia). Darwin began flying under the Etihad Regional brand this year.
Some industry observers downplayed the significance of the partnership.
"The folks over at Star Alliance are not exactly in secret meetings trying to figure out what to do," said Michael Boyd, president of Boyd Group International, who said the new group is a marketing arrangement, not an alliance.
But he saw no downside to the move, saying that it would deliver marginal additional business to Etihad.
Aviation analyst Robert Mann said putting the Etihad brand on a partnership with carriers that don't have Etihad's service standards could undermine the brand.
'A big benefit'
However, industry analyst Henry Harteveldt said that move is similar to that of a hotel company offering multiple brands that appeal to different types of customers. For example, Hilton Worldwide's brands can range from Hilton Garden Inns to Waldorf Astoria. He said the Etihad group serves a variety of clients, from the infrequent, price-focused leisure traveler to upscale travelers.
If Etihad can promise greater simplicity, more transparency and increased consistency, "that's a big benefit," Harteveldt said.
In addition, because Etihad has equity in most of the airlines, those shared financial stakes deepen the relationship in the partnership, Harteveldt said. At the same time, because it's not a full-fledged alliance, it offers more flexibility than an alliance. For example, members can belong to other airline groups.
He pointed out that the partner airlines are located in the right places for Etihad. Airberlin and Darwin Airline are in Western Europe; Air Serbia is in Eastern Europe and Jet Airways is in India. These are all important mature or developing markets.
"It is possible that some airlines that feel they don't get the attention or economic benefit that they value from being in an alliance may opt to leave one of the big ones and join Etihad," Harteveldt said.
He said the group could be the foundation for something bigger.