Etihad’s $US 100 million Air Serbia deal, given public confirmation in Belgrade this hour, swings open a new door into Europe for the UAE carrier to add to earlier door-openers in Eire with Aer Lingus and Germany with AirBerlin.
The major features of the arrangement are listed as:
· Etihad Airways to acquire 49 per cent of JatAirways
· JatAirways to be renamed and rebranded Air Serbia
· Etihad Airways awarded five-year management contract for new airline
· Etihad Airways and Government of Serbia both to inject USD 40 million
· Etihad Airways and Government of Serbia to each provide up to USD 60 million further funding
While Etihad is making much of the potential Air Serbia has to leverage its small network and fleet into something much larger as the former eastern European economies grow, this is acknowledged within the airline game as a very tough prospect.
Even reading between the lines of the official announcements, it is clear that before it grows the rebranded Air Serbia the state owned carrier is going to shed jobs, lift productivity, and engage in some fierce turf wars with the larger European carriers that could be seen as having pushed it around as JATAirways.
At the moment Air Serbia will have five ATR turboprops, 13 rather old 737s and two leased Fokker F100s in its fleet. But it is acquiring 14 Airbus single aisle jets and from October, will start its route expansion with a two class A319, flying Belgrade-Abu Dhabi four times weekly to to complement Etihad’s daily services between the cities.
The position in relation to Australia-Europe travel sees Etihad taking up partial ownership in co-operative connections over Abu Dhabi with the flag carriers of Eire, Germany and now Serbia. This is a much different strategy to that of Emirates, which competes head on with the national European carriers over its much larger UAE hub at Dubai.
Whether co-operative or confrontational approaches work best in terms of selling flights to European destinations from Australian cities may take some time, and large amounts of money, to determine.
But while the Dubai giant and its more recent competitor from Abu Dhabi go for the spoils and each other, consumers will have plenty of choices, from Australia, none of them flying Qantas.