Exclusive: Etihad CEO On Fleet Consolidation

Etihad has used the pandemic to accelerate its transformation into a high-end, mid-sized airline. Without a doubt, the fleet will look very different when the airline emerges from the COVID-induced slowdown. We spoke to Group CEO Tony Douglas about the strategy for its future fleet.

Etihad Boeing 787-9
Etihad’s future fleet will be smaller but more efficient. Photo: Vincenzo Pace | Simple Flying

Emerging from the troubled teenage years

Etihad’s strategy has not always been the most fruitful. Failed investments and inefficient operations led to year after year of loss upon loss. 2020 should have been the best year yet, but fate had a different plan in mind. Now, the airline is keenly looking towards the end of the current crisis and emerging in a powerful position to turn those losses into profit.

Speaking to Simple Flying, Tony Douglas, CEO of Etihad Aviation Group, noted that the airline had made some mistakes. Alluding to the trials we all go through in our teenage years, he said,

“Etihad is 17 years of age. We’re a teenager, and we made some mistakes in our earlier teenage years. We’re certainly not ashamed of that … I made a few mistakes when I was a teenager – I’d like to think it doesn’t make me a bad person. And I’d like to also think that most of us who’ve had a few hiccups, and in this case real challenges along the way, if you can recover from them, it wises you up and makes you an awful lot more sustainable going forward.”

Etihad Airways Boeing 777-300ER
Emerging from its teenage years has meant a reassessment of its priorities. Photo: Vincenzo Pace | Simple Flying

Noting that the quasi-alliance strategy of Etihad’s, which involved holding equity shares in a number of smaller airlines, was not successful, Douglas expanded on what this means for the airline going forward. He commented,

“We had to completely restructure the balance sheet, redesign the operating model of Etihad, and in some ways to get back to basics when it comes how we manage an efficient organization that’s got a fleet that is far more optimized for what I would describe as a mid-sized carrier.”

Abandoning the ‘big is beautiful’ philosophy has meant a complete repositioning of Etihad. This filters through to changes in its strategy, its network and, of course, its fleet.

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A slimmed-down, more efficient fleet

A phrase we’ve heard frequently from a number of airline CEOs is ‘never waste a good crisis.’ Etihad’s CEO wheeled this out also, but has translated this notion into clearly visible action. The five-year transformation plan is running around a year ahead of schedule, and while passenger traffic is expected to take another couple of years to get back to where it was in 2019, Etihad’s fleet is well-positioned to take advantage of this recovery. Douglas explained,

“Sadly, we took the decision to park our Airbus A380s. We got out of Triple Seven as one of our aircraft types, as well as the A330. We elected to consolidate, which was always our plan, around a very efficient and sustainable fleet of the 787 and also the introduction of the A350-1000. So a sizable fleet consolidation exercise.”

Etihad, Airbus A380, Teruel
The A380 is very unlikely to ever fly for Etihad again. Photo: Vincenzo Pace – Simple Flying

Building on the backbone of the 787 Dreamliner will allow Etihad to continue to be more efficient and sustainable going forward. The A350 will arrive in 2022, demand allowing, and eventually, the 777X will add large capacity to the highest demand missions. While Douglas has not entirely ruled out the A380, it requires a lot of things to change rather quickly to make it completely viable.

Summing up what the consolidation of the fleet means for Etihad, Douglas said,

“We are leaner, we’re more agile, and we’re still hunkered down. Our perspective is, we’re looking carefully at how we respond to travel restrictions easing, green lists starting to expand, so we can get very slowly back to bigger load factors. But we want to stay very much on trajectory as an airline that differentiates itself with great customer service, an incredible product offering and one that’s got wellness at the very heart of what we do.”

What do you think of Etihad’s fleet consolidation plans?