The veteran chief executive of Abu Dhabi's Etihad Aviation Group, which owns one of the Middle East's top airlines, will leave this year, but the carrier remains committed to a system of equity alliances that he developed, Etihad said on Tuesday (January 24).
Australian James Hogan, 60, who over the past 10 years built Etihad into an aggressive competitor to Dubai's Emirates and Qatar Airways, will step down as president and CEO of the group in the second half of 2017. Chief financial officer James Rigney will also leave this year, Etihad said.
Chairman Mohamed Mubarak Fadhel al-Mazrouei said Etihad was continuing a "company-wide strategic review" which could include adjustments to the network of equity partnerships with other carriers that Hogan used to engineer rapid growth at Etihad.
"We must ensure that the airline is the right size and the right shape. We must continue to improve cost efficiency, productivity and revenue. We must progress and adjust our airline equity partnerships even as we remain committed to the strategy,” he said.
However, an Etihad spokesman told Reuters there was no link between the review and Hogan's departure, which had been planned for many months.
Etihad owns stakes in seven airlines around the world: Air Berlin, Alitalia, Air Serbia, Air Seychelles, Etihad Regional, India's Jet Airways and Virgin Australia.
In 10 years, Etihad grew from a 22-plane regional carrier into a global operation with 120 aircraft. But in recent months, a slowing regional economy, overcapacity in the industry and a strong U.S. dollar have pressured its earnings.
Company and industry sources told Reuters in December that Etihad was reviewing its policy of investing in European airlines after continued losses at Air Berlin and Alitalia. That month, Etihad said it was cutting jobs in some parts of its business, but did not give a number.
On Monday, Alitalia, in which Etihad has a 49 percent stake, said it planned to cut non-labour related costs by at least 160 million euros ($172 million) this year as it tried to become profitable again.
The Italian carrier is going through a heavy restructuring which sources said may include up to 2,000 job cuts and the grounding of planes.
On Tuesday, Etihad said it had started a global search for a new group CEO and a new CFO. It said it was grateful to Hogan and that he and Rigney would join an investment company, which it did not name.
(Reuters)
