The global air travel map is being redrawn as growth rates slow in traditional markets and surge in evolving economies including India, Africa and Latin America, President and CEO of Etihad AirwaysJames Hogan has said.
Hogan's comments have come after the recent announcement by Etihad Airways of a 24 per cent strategic equity investment in Jet Airways the second largest airline in India.
Delivering the fifth annual Airneth Lecture to aviation industry executives, policymakers and researchers in Amsterdam, Hogan said the major shift occurring in the global economy is impacting significantly the air transport industry, requiring airlines to reshape their networks and enter new partnerships in order to remain competitive.
He said markets which would benefit most from the continued growth in air transport would be those in 'aviation-friendly jurisdictions' in which governments recognised the economic contributions of airlines and the technological advances and capabilities of aircraft.
"Legacy markets are growing, but at a slower pace. Emerging markets are surging. Traffic patterns and demographics are changing. Traditional air transport hubs are declining in prominence, with growth constrained by inadequate infrastructure and ingrained political resistance to change.
"The Arabian Gulf - the geographic centre of the world - is now evolving as the global centre of the air transport industry, with the number of passengers passing through Gulf hubs outstripping industry growth rates," said Hogan.
IATA figures shows that in February, 2013, Middle East hub traffic was up by 10.6 per cent over February, 2012, compared with the global growth rate of 3.7 per cent.
Hogan said the airline industry is entering a new phase of consolidation, as no single carrier could satisfy the global growth in passenger traffic.
Hogan's comments have come after the recent announcement by Etihad Airways of a 24 per cent strategic equity investment in Jet Airways the second largest airline in India.
Delivering the fifth annual Airneth Lecture to aviation industry executives, policymakers and researchers in Amsterdam, Hogan said the major shift occurring in the global economy is impacting significantly the air transport industry, requiring airlines to reshape their networks and enter new partnerships in order to remain competitive.
He said markets which would benefit most from the continued growth in air transport would be those in 'aviation-friendly jurisdictions' in which governments recognised the economic contributions of airlines and the technological advances and capabilities of aircraft.
"Legacy markets are growing, but at a slower pace. Emerging markets are surging. Traffic patterns and demographics are changing. Traditional air transport hubs are declining in prominence, with growth constrained by inadequate infrastructure and ingrained political resistance to change.
"The Arabian Gulf - the geographic centre of the world - is now evolving as the global centre of the air transport industry, with the number of passengers passing through Gulf hubs outstripping industry growth rates," said Hogan.
IATA figures shows that in February, 2013, Middle East hub traffic was up by 10.6 per cent over February, 2012, compared with the global growth rate of 3.7 per cent.
Hogan said the airline industry is entering a new phase of consolidation, as no single carrier could satisfy the global growth in passenger traffic.
Indian market is fundamental to our business model, said James Hogan on Wednesday. Speaking after Jet Airways and Etihad announced their deal, Hogan said the airline will invest $150 million in Jet's privilege programme.
"The Indian market is fundamental to our business model of organic growth partnerships and equity investments. This deal will allow us to compete more effectively in one of the largest and fastest-growing markets in the world," Hogan said.
Stating that the deal will provide global growth opportunities to both the companies, Hogan added that it will bring immediate revenue growth. "The deal is expected to bring cost synergy opportunities," he added.
"Our initial estimates are of a contribution of several hundred million dollars for both airlines over the next five years," he said.
Hogan said, "We are pleased to have reached this significant stage in India with Jet Airways and are certain the partnership will bring significant benefits and opportunities for global growth to both airlines."
"We look forward to collaborating with Jet Airways and constructively working together with them and their stakeholders to build a sustainable, competitive and profitable airline," he said. The substantial ownership post the deal will remain with Indian nationals, Etihad said.
In addition to its new investment in Jet Airways, Etihad Airways has acquired stakes in airberlin (just under 30 per cent), Air Seychelles (40 per cent), Virgin Australia (8.56 per cent) and Aer Lingus (just under 3 per cent), and continues to explore opportunities where they make financial and strategic sense.
» Read Complete News....."The Indian market is fundamental to our business model of organic growth partnerships and equity investments. This deal will allow us to compete more effectively in one of the largest and fastest-growing markets in the world," Hogan said.
Stating that the deal will provide global growth opportunities to both the companies, Hogan added that it will bring immediate revenue growth. "The deal is expected to bring cost synergy opportunities," he added.
"Our initial estimates are of a contribution of several hundred million dollars for both airlines over the next five years," he said.
Hogan said, "We are pleased to have reached this significant stage in India with Jet Airways and are certain the partnership will bring significant benefits and opportunities for global growth to both airlines."
"We look forward to collaborating with Jet Airways and constructively working together with them and their stakeholders to build a sustainable, competitive and profitable airline," he said. The substantial ownership post the deal will remain with Indian nationals, Etihad said.
In addition to its new investment in Jet Airways, Etihad Airways has acquired stakes in airberlin (just under 30 per cent), Air Seychelles (40 per cent), Virgin Australia (8.56 per cent) and Aer Lingus (just under 3 per cent), and continues to explore opportunities where they make financial and strategic sense.
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