Etihad launches airline alliance to take on competition

Etihad has formed the alliance with Jet Airways, Air Serbia, Air Seychelles, Darwin Airline & airberlin

Abu Dhabi-based Etihad Airways has launched a new airline alliance - Etihad Airways Partners - that will offer enhanced network and frequent-flyer miles benefits to customers.

Initially, six airlines, including Jet Airways, will be members of the new grouping. Notably, any airline can become an ‘Etihad Airways Partner’ even if it is a member of an existing alliance, Etihad said on Wednesday. The other members are Air Serbia, Air Seychelles, Darwin Airline and airberlin, besides Etihad. Virgin Australia, in which Etihad holds a 21 per cent stake, does not feature in the list. Even Alitalia, which is negotiating stake sale with Etihad, has not joined as a member.

Globally, there are three airline alliances – Star Alliance (of which Air India is a member) is the largest with 26 per cent share, followed by Sky Team and oneworld.

Among the Gulf airlines, Qatar Airways is part of oneworld while Emirates is unaligned. Etihad is following a different growth path by picking up stake in airlines around the world and is set to challenge existing alliances with its own grouping.

Alliances offer lounge access and free miles to frequent flyers, which they can earn and burn on flying with member airlines. Carriers can maximise revenue opportunities through better commercial tie-ups by joining such groups.

James Hogan, CEO of Etihad Airways, said: “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... Frequent flyers will benefit from the formation of Etihad Airways Partners as it will remove the complexity and confusion that exists within the global alliances. We’re aiming to deliver a consistent experience for frequent flyers when they travel, as well as a consistent framework for earning and using their miles.’’