Etihad slims down as Abu Dhabi trims its air travel ambitions

Etihad Airways Airbus A320-200 plane is seen at the National Airport Minsk, Belarus April 19, 2018. (Reuters)
Updated 03 July 2018

Etihad slims down as Abu Dhabi trims its air travel ambitions

  • Top official says the state-owned airline was becoming “more rational” and would not shy away from dropping routes that were commercially unsustainable
  • Etihad plunged to a loss in 2016 following a slowdown in passenger traffic growth and failed investments in foreign airlines

DUBAI: Abu Dhabi has abandoned its goal of becoming a major air travel hub akin to Dubai and is instead reorganizing its airline Etihad into a mid-sized carrier focused on direct flights in an attempt to return it to profit.
Recently-appointed Etihad Airways Group Chief Executive Tony Douglas said on Tuesday the state-owned airline was becoming “more rational” and would not shy away from dropping routes that were commercially unsustainable.
After years of rapid expansion, Etihad plunged to a loss in 2016 following a slowdown in passenger traffic growth and failed investments in foreign airlines such as Air Berlin and Alitalia.
It has been restructuring since, and on Tuesday said it had reorganized into seven business units directly reporting to Douglas, as opposed to individual businesses operating under a group structure set up by his predecessor.
Some senior and mid-management employees will lose their jobs and others will be moved into new positions, Douglas told Reuters by phone, declining to disclose the number of jobs likely to be affected.
He said many thousands of people had left since the restructuring process began in 2016, but that job cuts were no longer a major focus for the group and that the reorganization was about improving operational efficiency.
Etihad currently employs around 23,000 people.
The group also said Douglas had taken over direct responsibility of the airline business from Peter Baumgartner, who will continue to work with Etihad as an adviser.

Douglas joined in January from Britain’s ministry of defense, replacing veteran group CEO James Hogan who left months earlier as a strategic review got underway.
Under Hogan, Etihad spent billions of dollars buying stakes in other airlines as it sought to transform Abu Dhabi into a major hub like Emirates has done for Dubai 128 kilometers away.
Etihad is now focused on point-to-point traffic to destinations where passengers want to visit Abu Dhabi, and not just fly through it, Douglas said.
Abu Dhabi, the oil-rich capital of the United Arab Emirates (UAE), is hoping culture will attract tourists and last year opened a branch of the Louvre museum.
Etihad’s strategy of investing in other airlines unraveled last year with the collapse of Air Berlin and problems at Alitalia.
Douglas said, however, that Etihad would continue to hold its stakes in India’s Jet Airways, Virgin Australia, Air Serbia, and Air Seychelles.
The carrier issued $1.2 billion in bonds with some of the airlines it owns stakes in. After the collapse of Alitalia and Air Berlin those bonds have nosedived. Some investors expected Etihad or other Abu Dhabi entities to back the bonds.
Douglas said Etihad would continue to fulfil its obligations to the bonds, but declined to comment further.
Etihad is not legally obliged to back the bonds.

Electric luxury vehicles, SUVs ‘more likely to cause accidents’

Updated 23 August 2019

Electric luxury vehicles, SUVs ‘more likely to cause accidents’

  • As EV sales rise, French insurer AXA warns that drivers are struggling to adapt to cars’ rapid acceleration

LONDON: Electric luxury cars and sport utility vehicles (SUVs) may be 40 percent more likely to cause accidents than their standard engine counterparts, possibly because drivers are still getting used to their quick acceleration, French insurer AXA said.

The numbers, based on initial trends from claims data and not statistically significant, also suggest small and micro electric cars are slightly less likely to cause accidents than their combustion engine counterparts, AXA said at a crash test demonstration on Thursday.

AXA regularly carries out crash tests for vehicles. This year’s tests, which took place at a disused airport, focused on electric cars.

Overall accident rates for electric vehicles are about the same as for regular cars, according to liability insurance claims data for “7,000 year risks” — on 1,000 autos on the road for seven years — said Bettina Zahnd, head of accident research and prevention at AXA Switzerland.

“We saw that in the micro and small-car classes slightly fewer accidents are caused by electric autos. If you look at the luxury and SUV classes, however, we see 40 percent more accidents with electric vehicles,” Zahnd said.

“We, of course, have thought about what causes this and acceleration is certainly a topic.”

Electric cars accelerate not only quickly, but also equally strongly no matter how high the revolutions per minute, which means drivers can find themselves going faster than they intended.


Accident rates among luxury and SUV electric vehicles are 40 percent higher than for their combustion engine counterparts.

Half of electric car drivers in a survey this year by AXA had to adjust their driving to reflect the new acceleration and braking characteristics.

“Maximum acceleration is available immediately, while it takes a moment for internal combustion engines with even strong horsepower to reach maximum acceleration. That places new demands on drivers,” Zahnd said.

Sales of electric cars are on the rise as charging infrastructure improves and prices come down.

Electric vehicles accounted for less than 1 percent of cars on the road in Switzerland and Germany last year, but made up 1.8 percent of Swiss new car sales, or 6.6 percent including hybrids, AXA said.

Accidents with electric cars are just about as dangerous for people inside as with standard vehicles, AXA said. The cars are subject to the same tests and have the same passive safety features such as airbags and seatbelts.

But another AXA survey showed most people do not know how to react if they come across an electric vehicle crash scene.

While most factors are the same — securing the scene, alerting rescue teams and providing first aid — it said helpers should also try to ensure the electric motor is turned off. This is particularly important because unlike an internal combustion engine the motor makes no noise. In serious crashes, electric autos’ high-voltage power plants automatically shut down, AXA noted, but damaged batteries can catch fire up to 48 hours after a crash, making it more difficult to deal with the aftermath of
an accident.

For one head-on crash test on Thursday, AXA teams removed an electric car’s batteries to reduce the risk of them catching fire, which could create intense heat and toxic fumes.

Zahnd said that studies in Europe had not replicated US findings that silent electric vehicles are as much as two-thirds more likely to cause accidents with pedestrians or cyclists.

She said the jury was still out on how crash data would affect the cost of insuring electric versus standard vehicles, noting this always reflected factors around both driver and car.

“If I look around Switzerland, there are lots of insurers that even give discounts for electric autos because one would like to promote electric cars,” she said.