Etihad CEO: Airlines must adapt to ‘the new world’

The global air travel map is being redrawn as new markets evolve, traditional markets decline and the airline industry reshapes itself to accommodate changing conditions, said Etihad Airways’ President and CEO James Hogan.
Speaking in Abu Dhabi at the World Travel and Tourism Council Global Summit, Hogan told more than 800 senior travel executives that legacy airlines were unlikely to progress unless they radically changed the way in which they did business.
In addition to the ongoing challenges of economic instability and uncertainty surrounding fuel prices and supply, Hogan said the rapid growth of air travel in markets such as India, Africa and the Middle East meant airlines would need to reshape their networks to accommodate changing traffic flows.
In order to participate in the new world of air travel, Mr.Hogan said the next generation of airlines would need “the vision and willingness to be different”, in order to cut costs, improve productivity and find affordable ways of accessing new markets.
“Airlines across the world need to adapt to ‘the new world’ and identify and tap into growth markets. The industry must source and train staff for this new growth, as well as explore cost-effective growth opportunities,” Hogan said.
He said Etihad Airways’ had created a new three-pillared business model, based on organic growth, codeshare partnerships and minority equity investments in other carriers. This strategy was underpinned by development of Abu Dhabi as a new global air transport hub, connecting the networks of partner airlines, Hogan said: “Our equity investment proposition ensures commitment and obligation from both airlines and streamlines our entry into new markets, affordably and within foreign investment limits. This strategy helps us avoid the drawn-out process which applies for mergers and larger investments.”
Hogan said the Etihad Airways strategy was to focus on growth markets and continue to build “a new ‘Silk Road’ that connects markets via the Abu Dhabi hub.