Etihad CEO James Hogan will be leaving the airline in the second half the year.
Hogan’s previous role was CEO of Gulf Air. At the end of his four year tenure there the carrier was de-emphasizing its Abu Dhabi hub, and he was hired away to build an independent airline based in the UAE capital. He had earlier run bmi British Midland, where many of his ideas running an airline got their start such as inflight chefs (for business class).
He built a major Gulf player, but also a loss-maker — while the airline certainly invests in passenger experience, its the carrier’s investments in airlines around the world that drove red ink and ultimately leads to his departure.
Primarily Etihad’s losses in air berlin and Alitalia are the key here, though Etihad has a broad portfolio of currently or previously troubled carriers they tried to turn around in order to direct traffic through their Abu Dhabi hub including minority stakes in Air Seychelles, Virgin Australia, Air Serbia, Darwin Airline (now Etihad Regional) and Jet Airways (and previously Aer Lingus). They developed a strategy in some cases of exercising control without running afoul of foreign ownership rules by buying stakes in an airline’s loyalty program not subject to those caps.
The 60-year-old Australian will leave in the second half as Etihad reviews its own operations and the future direction of Hogan’s so-called equity alliance, which has seen the Gulf carrier take minority stakes in a variety of smaller and often ailing airlines across Europe and the Asia-Pacific.
“We must ensure that the airline is the right size and the right shape,” Etihad Aviation Group Chairman Mohamed Mubarak Fadhel Al Mazrouei said in a statement Tuesday. “We must progress and adjust our airline equity partnerships even as we remain committed to the strategy.”
Etihad’s CFO will also be leaving with Hogan, and the two are expected to join “an investment company located outside the United Arab Emirates and not affiliated to Etihad.”