Etihad once had ambitions of being its own alliance. Etihad Airways Partners included troubled carriers Alitalia and airberlin, and they’ve walked away from billions in losses in those two airlines. Jet Airways may even fall under the ‘troubled’ banner now, and Etihad still owns a 24% stake but hasn’t been nearly as involved in the running of the carrier.
As the Al Nahyan tired of absorbing losses, the airlines’ leadership was changed and given a mandate to scale back and cut costs. It’s long seemed like their best bet would be an Emirates merger but though the carriers have worked more closely with each other over the past year a tie-up could be hard to do in a face-saving way for the two emirates. The new Dubai airport, closer to Abu Dhabi, has long seemed like a good solution to this.
Etihad has talked up a strategy of linking up with several Star Alliance airlines saying that since they are no longer ‘their own alliance’ this isn’t in conflict with Star rules. This seemed like an odd statement since Etihad has already been codesharing with Aegean, ANA, Air Canada, Asiana, Brussels Airlines, Lufthansa, SAS, SWISS, TAP Air Portugal, and Turkish.
Noentheless closer bilateral ties with airlines across the Star Alliance is an officially stated objective of Etihad’s CEO< fueling speculation that a natural extension of these ties could be full alliance membership. One hurdle could be objections from another troubled carrier, Star Alliance member Air India. Etihad isn't the only Gulf carrier pursuing closer ties with the Star Alliance though. Gulf Air says this is their objective as well.
Last month the CEO of the Bahrain-based airline laid out plans involving closer partnerships to bring the carrier to profitability. So far that’s meant codesharing with Star Alliance members Aegean Airlines and Turkish Airlines, and this strategy is expected to grow.
Etihad has already been working closely with Lufthansa, which gives them a bigger leg up in negotiations for full membership if they choose to pursue that route, despite past frictions with European and US airlines. Gulf Air on the other hand comes with less baggage in terms of historical relationships, and indeed Etihad was born out of Gulf pulling out of its Abu Dhabi hub.
It’s unlikely that both could join, though certainly geographically-close airlines have been part of Star (Aegean and Turkish, THAI and Singapore, and in the past United and US Airways).
While not strictly brand new news, these rumors have been swirling for a month, it’s interesting to watch Star carriers cement themselves in the region giving them lift in and out of India, Pakistan, and the vicinity (beyond what they already get from basket case Air India). Delta has a new close partnership with Jet Airways. And American remains out in the cold having lost their Gulf Air partnership and having intentionally severed ties with Qatar and Etihad (more or less falling into Delta’s trap going along with the political attack on Gulf carriers, Delta came out smelling like a rose while American lost its Jet linkup).
The world’s largest carrier, American, slipped behind Delta last quarter in terms of revenue and is on the verge of losing its title — while Delta continues to build its business through investments in airlines in faster-growth areas of the world compared to the mature US market, while Star continues its expansion as well.