August 07, 2013
Etihad is in the final stages of negotiating the major aircraft order that it has been discussing with Airbus and Boeing, says airline CEO James Hogan.
Hogan said on the sidelines of the Center for Aviation’s Australia Pacific Aviation Summit in Sydney that he hopes to announce a deal within 6-8 weeks. He would not say which of the manufacturers the agreement will be with, or whether it will be a split order.
The prospective order will be for deliveries in the 2020-2040 timeframe. It will be a joint order covering not just Etihad, but also some other carriers that the airline has an ownership stake in. The agreement is currently intended to include Air Berlin, Jet Airways and Air Seychelles, although Etihad has left the door open for Virgin Australia and Aer Lingus to participate. The order will have enough flexibility for aircraft to be procured for any of the carriers, Hogan says.
Joint procurement initiatives like this give the airlines greater bargaining power with manufacturers and parts providers, Hogan notes. Another major aim of this joint approach is to lower costs by having commonality in areas like training and cabin interiors, as well as creating opportunities for aircraft to be repositioned between airlines to take advantage of seasonal demand.
Etihad is also making progress in gaining final approval for its acquisition of a 24% stake in India’s Jet Airways. Hogan says there are still a couple of steps in the regulatory process, and the Indian cabinet must also sign off on the deal. He says it could be finalized in 7-8 days.