(Washington, D.C.) – In March of 2013, Etihad Airways — the world’s fastest growing commercial airline— will launch daily non-stop service from Abu Dhabi to metropolitan Washington, D.C.’s Dulles International Airport.

This Wednesday, the U.S.-U.A.E. Business Council hosted a luncheon honoring Etihad Airways’ president and chief executive officer James Hogan at the W Hotel in Washington, D.C. to highlight the March 2013 route opening. The highly-attended event attracted senior government officials including diplomatic representatives from the U.A.E. Embassy in Washington, D.C. and other Arab embassies, executives representing American and Emirati businesses, media reporters, and stakeholders in the U.S.-U.A.E. commercial aviation relationship.

Danny Sebright, president of the U.S.-U.A.E. Business Council provided welcome remarks and underscored the importance of understanding opportunities to form corporate partnerships with and benefit from the U.A.E.’s rapidly expanding commercial aviation sector. In his remarks, Sebright applauded Etihad Airways and James Hogan personally for his successful and ongoing efforts to raise the global profile of the airline and the U.A.E.’s stance as a global transit point.

“Under Mr. Hogan’s leadership, Etihad Airways and its reputation has grown exponentially; helping to connect Abu Dhabi to key global markets like D.C. while supporting economic development in Abu Dhabi and around the world,” said Sebright. “Since the airline was founded less than a decade ago, Etihad Airways has served as a key customer of American-made aircraft and airplane parts, and is helping to create and sustain American jobs across the commercial aviation supply chain. Further, the D.C. flight launch will mark Etihad Airways’ third non-stop destination in the U.S. and will serve to directly enhance social and commercial ties between the U.S. and U.A.E.”

Following his comments, Sebright introduced Hogan to present a short video about Etihad Airways and deliver his keynote remarks. During his speech, Hogan detailed Etihad Airways’ increasingly globalized corporate profile, emphasized the significance of the U.S. market to the airline’s overall expansion strategy, and noted the strength of its partnerships, particularly with American commercial aviation companies such as Boeing and Sabre.

Addressing the largely D.C.-based audience, Hogan spoke to the airline’s new model of navigating the limitations of the global aviation sector: partnerships. Etihad Airways has codeshares in place with 41 partners, expanding its network of destinations to 327 major cities, and the Abu-Dhabi based airline also holds equity stakes in airberlin, Air Seychelles, Virgin Australia and Aer Lingus.

“Our equity stakes are not about seeking control; they are about cementing partnership – partnership that will deliver growth in a constrained and challenged global landscape. They are about us putting skin in the game, betting on the success of our commercial relationships. This year, those partnerships will deliver something in the region of 20 per cent of our total revenues.

“So, in our new model, we have taken what we believe is the smart approach to work around the limitations of the global aviation sector. Partnership allows us to work with airlines around the world, extending our reach and our network to become a truly global carrier. Partnership allows us to cooperate with companies such as American Airlines, to offer our passengers – and theirs – new choices across the globe.”

Following Hogan’s speech, Sebright rejoined him at the podium to moderate an on-the-record question and answer session. During the session, audience members and reporters were provided with an opportunity to engage Etihad Airways’ CEO directly and Hogan took several questions focused around the airline’s corporate structure, the U.A.E.’s recent emergence as a key player in the global commercial aviation sector, and the launch of Etihad Airways’ flights into Dulles in March.

Etihad Airways’ direct flight to Dulles, announced in February of this year, will officially launch on March 31, 2013. Information about the AUH-IAD direct service can be found on the airline’s website: www.etihad.com. The full text of Hogan’s speech can be found below.

-Ends-

About Etihad Airways

Etihad Airways, the national airline of the United Arab Emirates, began operations in 2003, and in 2011 carried 8.3 million passengers. From its hub at Abu Dhabi International Airport, Etihad Airways serves 86 passenger and cargo destinations in the Middle East, Africa, Europe, Asia, Australia and the Americas, with a fleet of 67 Airbus and Boeing aircraft, and over 90 aircraft on firm order, including 10 Airbus A380s, the world’s largest passenger aircraft. Etihad Airways also holds equity investments in airberlin, Air Seychelles, Virgin Australia and Aer Lingus.

For more information, please visit: www.etihad.com.

 

About the U.S.-U.A.E. Business Council

The U.S.-U.A.E. Business Council is a progressive business advocacy organization solely committed to the advancement of the trade and commercial relationship between the United States and the United Arab Emirates. The U.S.-U.A.E. Business Council provides its diverse membership unparalleled access to senior decision makers in business and government in the U.A.E. and in the U.S. The Business Council actively works to ensure that the U.S. and U.A.E. remain attractive destinations for foreign direct investment by conducting effective policy advocacy, undertaking various trade promotion initiatives, providing ongoing updates on the business climate in both countries, and helping develop strategic relationships between U.S. and U.A.E. business and government officials.

For more information, visit: www.usuaebusiness.org

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A new way of doing things: Together

James Hogan, President & CEO of Eithad Airways

Address to U.S.-U.A.E. Business Council Luncheon

November 14, 2012

Washington, D.C.

Good afternoon, ladies and gentlemen.

It is a great pleasure to be in Washington again and it is particularly exciting to be here at this time. The eyes of the world have been on the United States of America over recent weeks and I congratulate you on your successful elections, with such powerful campaigns by both candidates.

It is also a great pleasure to be back in the United States, where Etihad Airways has so many important business partnerships. We presently fly direct from Abu Dhabi to New York and Chicago, and since operations started have carried nearly 1.5 million travellers between our nations. And from March next year, this beautiful city will also join our route network.

Our own network is extended by our business partnership with American Airlines, which adds direct access to almost 70 major destinations across the USA.

But our partnership here goes beyond our flight operations, with many of our company’s most important strategic partners being American companies. We currently operate 14 Boeing aircraft but have another 51 on order, including 41 Boeing 787 Dreamliners. With our equity partners, we will be operating the largest fleet of Dreamliners anywhere in the world. Our orders and current contracts with American engine manufacturers are worth many billions of dollars.

And last year, we signed a billion-dollar long-term agreement with Sabre, the leading American aviation technology solutions provider.

I’m hoping that I can get through this trip without signing any 10-figure cheques!

People say the world is changing.

The world is not changing.

The world has changed.

The global economic crisis has changed economies, it has changed industries and it has changed businesses.

We have all felt its impact. We’ve all had to react to new economic realities.

The air travel industry has been no exception. Aviation is one of the most sensitive barometers to macroeconomics. In every major recession, it is airlines that feel it first and often it is airlines that feel it hardest.

To put that in perspective: This is an industry that has lost more money than it has made in more than a hundred years of operation.

One of the reasons that the industry is hit so hard is its structural inefficiency. Aviation is an industry that, across much of the world, is still governed by rules that date back to 1945.

1945. A time not just before the Jumbo jet but before long-haul passenger aircraft full stop.
A time not just before the Internet, but before computing full stop.

A time when televisions were only just starting to fit into people’s sitting rooms, never mind onto their seat backs.

All those things have changed. But many of the rules that we operate under have not.

The result is an industry which remains heavily regulated and commercially prejudiced.

Consolidation, a common feature of corporate belt-tightening in almost every major industry, has not been possible to the same extent in aviation.

The result is an industry still facing the same, frustrating internal and external systemic constraints to growth and meaningful profitability. In the last few years, however, we have started to see new approaches. And I’d like to talk today about the new approach that Etihad Airways is taking: our new model.

Etihad Airways has taken advantage of Abu Dhabi’s unique strategic geographical position to establish and build one of the fastest-growing airlines in aviation history.

In less than 10 years, we have taken a blank sheet of paper and created a business with:

– 10,000 employees, more than 130 nationalities
– state-of-the-art infrastructure and facilities
– award-winning best-in-class service
– 67 aircraft, flying to 86 destinations, serving more than 10 million passengers this year.

Notice I don’t say we have created an airline, I say we have created a business.

In 2011, Etihad delivered $4.1 billion in revenues, up 37 per cent over 2010. Despite our relative youth as a business, and despite our continued and significant investment in new routes, new services and new infrastructure, we delivered a profit. Yes, we were one of the few that did so in 2011.

Our net profit of US$ 14 million – the first in the airline’s history – was just the latest milestone in a journey to establish a sustainably profitable business.

Commercial viability is just one of the three pillars of our core strategy. In addition, we are creating the best – not the biggest, but the best – airline in the world. And we aim to drive and support the long-term economic development of Abu Dhabi.

There are various factors behind our success.

I could tell you about how, as an airline, we benefit from operating from a hub that provides one-stop connectivity between East and West, between North and South; how our wide range of market segments – business, tourism, worker traffic, pilgrim traffic, the established markets of Europe and the booming economies of Asia – give us protection against the vagaries of economic cycles.

I could talk about how the strategic development and diversification of the Abu Dhabi economy is creating major new industries – from aerospace to advertising, from industrial parks to organic farming, from peaceful nuclear energy to real estate. New industries mean new growth – which means greater trade.

I could talk about the booming tourism market, which has seen Abu Dhabi emerge as an exciting new destination in Middle East tourism. From Formula 1, to the world’s biggest indoor theme park, to new golf courses, scores of new hotels and MICE infrastructure, Abu Dhabi now has an increasingly strong offer. It’s becoming a destination of choice for all kinds of travellers – from couples and families looking for a relaxing holiday in the sunshine, to groups of thousands meeting for industry events just like this one.

But today, I want to focus on what I think is one of the most important factors: partnership.
Abu Dhabi, culturally, has a natural leaning to partnership. This is a market, and a culture, in which people instinctively seek to work together to develop common solutions. When you come from a harsh desert environment, where it regularly hits 120 degrees plus, you have to work together, just to survive.

You can see that partnership culture in play today by looking at some of the major projects across the Emirate, and looking at the role-call of best-in-class companies and organisations that Abu Dhabi has chosen to work with in developing its economy. From the Cleveland Clinic in healthcare, to Boeing in aerospace, to NYU in education, Abu Dhabi looks to cooperation.

You can see it in our own industry, by the unilateral open skies philosophy adopted by the UAE; an incredibly positive approach to welcoming new airlines from every market.

And you can see it at Etihad Airways.

From very early on, we recognised we needed to work with other airlines if we were to achieve scale and build our competitive position.

So strategically we’ve always taken a positive approach to partnership.

Today, we have codeshares in place with 41 partners, expanding our network of destinations to 327 major cities – more than any other Middle Eastern airline.
In building those partnerships, we’ve taken a deliberately wide-ranging approach, working with airlines from all markets and – perhaps most importantly – from across all of the major alliances.

Those codeshares have played an important role in the growth of our business, feeding passengers into our global network and delivering a constant and growing revenue stream for the business.

In 2010, we started to look for ways to take that approach further.
In August of that year, we announced a 10-year strategic partnership with Virgin Australia.

Under the terms of that partnership, we would codeshare with Virgin – but we would do a lot more. Virgin would start flights from Sydney to Abu Dhabi; we would offer ‘earn-and-burn’ on each other’s FFP programmes; and we would start joint marketing of our services.

The results were outstanding. In the first year alone, we saw an uplift in revenues of more than 700 per cent, compared to our previous – codeshare only – relationship.

Most importantly, the benefits worked both ways – both airlines seeing passenger and revenue growth.

So we started to look for ways to take this approach still further.

In December 2012, we announced our first equity investment, following the purchase of a 29.21 per cent stake in airberlin – Europe’s sixth largest airline group. With equity came even greater opportunity. As well as flights into Abu Dhabi, this time from Berlin, joint FFP and other marketing initiatives, our companies could afford to think more strategically, more long term.

So we now have teams working together on cost synergy programmes, on opportunities for fleet order and delivery coordination, on pilot training programmes… the list goes on and on.

A month later, we announced an investment in Air Seychelles, and in the months that followed, we acquired equity stakes in Aer Lingus and in our first strategic partner, Virgin Australia.

In each case, we have taken only a minority stake – and we have made clear that is all we are interested in.

Our equity stakes are not about seeking control; they are about cementing partnership – partnership that will deliver growth in a constrained and challenged global landscape. They are about us putting skin in the game, betting on the success of our commercial relationships.

This year, those partnerships will deliver something in the region of 20 per cent of our total revenues.

So, in our new model, we have taken what we believe is the smart approach to work around the limitations of the global aviation sector.

Partnership allows us to work with airlines around the world, extending our reach and our network to become a truly global carrier.

Partnership allows us to cooperate with companies such as American Airlines, to offer our passengers – and theirs – new choices across the globe.

Partnership allows us to create centres of excellence at strategic locations across the globe delivering saving and synergy across our equity alliance.

And partnership allows us to work on new product and service synergies to cut out the cost and inefficiencies that keep the aviation industry in the financial doldrums.

It is apparent other airlines are also starting to recognise the importance of such partnerships, with new long-term ventures and equity deals being discussed across the industry.

So finally perhaps, the air travel industry is changing too. Perhaps it is realising there is a new way of doing things. Together.

Thank you for your time.