Etihad Airways has agreed to divest nearly all of its subsidiary businesses as part of a major shakeup to help turn the core airline business around. All of Etihad’s services businesses, including Etihad’s catering division and cargo company, will be sold to government-owned holding companies, the official Abu Dhabi media office announced.
The eight businesses being sold off are Etihad Engineering, Etihad Airport Services Cargo, Etihad Airport Services Ground, Etihad Aviation Training, Etihad Secure Logistics, Etihad Technical Training, Etihad Airport Services Catering and Etihad Holidays.
The broad range of airline service businesses that formed the Etihad Aviation Group was part of Etihad’s failed plan to turn itself from a small regional player into what it described as a “global aviation challenger”.
Etihad’s meteoric rise which was marked by a very rapid expansion and multiple investments around the world was quickly followed by major losses that the Abu Dhabi government have been struggling to claw back ever since.
Current chief executive Tony Douglas was brought onboard to radically transform the business, dramatically scaling back Etihad’s grand ambitions and turning the carrier into a smaller but profitable airline.
Douglas has “retained a singular focus on cost control” helping Etihad to get closer into the black but the pandemic has pumped the brakes hard on his efforts to turn the airline around.
“The past two years have changed the face of aviation and the proposed agreement marks a significant milestone in how we are repositioning Etihad Airways and our subsidiaries for long-term success,” Douglas said on Thursday.
“This agreement will allow us to place 100% of our focus on Etihad Airways to capitalise on recovering travel demand and will benefit our staff, the millions of guests who fly with Etihad Airways every year, and Abu Dhabi’s wider aviation sector,” Douglas continued.
“With a new, single-minded focus on our airline business, we will continue to deliver on the best-in-class and sustainable travel experience that our guests expect of Etihad Airways.”
Sovereign wealth fund ADQ will absorb six of Etihad’s businesses, while the Abu Dhabi National Exhibition Company will take over the catering and holidays businesses. The ground handling, cargo and maintenance companies are likely to be completely rebranded in order to attract a wider client base of airlines.
In a statement, the Abu Dhabi media office said the businesses would remain “key long-term strategic partners to Etihad Airways”.
