Etihad Increases Stake in airberlin to 29.21%

19.12.2011 Aviation & Space
Etihad Increases Stake in airberlin to 29.21%

Etihad Increases Stake in airberlin to 29.21%

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Etihad Airways, the national airline of the United Arab Emirates (UAE), has agreed to increase its stake in airberlin, Europe’s sixth largest airline, to 29.21%, becoming airberlin’s largest single shareholder.

The strategic move, announced today in Berlin by Etihad Airways Chief Executive Officer James Hogan and airberlin CEO Hartmut Mehdorn, connects the airlines’ extensive networks and frequent flyer programs to offer travelers 239 destinations across 77 countries.

Hartmut Mehdorn said: “The strategic partnership with Etihad Airways opens up enormous opportunities for the future of our company. This applies especially to future market development and the realization of synergies. One of the key components of the new partnership is the launch of airberlin services to Abu Dhabi, which will become our new gateway to Asia and Australia.”

“The agreement with Etihad Airways will also dramatically improve the global connectivity of our customers in Germany, Switzerland, Austria, and throughout the GCC and Middle East,” Mehdorn added.

James Hogan said the deal was one of the most important in Etihad Airways’ history. “This new partnership expands our network reach, gives us access to 33 million new passengers, and provides us with a real opportunity for global growth. Through airberlin, we gain immediate access to a broad and complementary European market, with outstanding connectivity options for customers of both airlines.”
“We now have a portfolio of 34 quality airline partners, but this is our first equity investment in another airline. It is a sign of our confidence in airberlin’s management and in the carrier’s potential to grow with us. We expect such growth will also offer a host of additional employment opportunities, both in Europe and the UAE,” Hogan said.

“Etihad Airways and the airberlin group carry a combined total of more than 40 million passengers a year, operate 233 aircraft, and employ 18,000 people. Together, the companies generate more than US$ 9 billion in revenues. We estimate each airline could achieve incremental revenues of between EUR 35 million and EUR 40 million just in the first year, and we believe the partnership has enormous potential to unlock a range of efficiencies,” he added.

Under the agreement, Etihad Airways will have two seats on the Board of Directors of the Air Berlin PLC.

The two companies will seek anti-trust immunity, which would allow greater coordination of route networks and of sales and marketing activities.

airberlin and Etihad Airways are committed to creating a joint procurement taskforce to look for cost efficiencies across the two companies, including areas such as fleet procurement and deployment, maintenance, repair and overhaul (MRO) and general procurement.

Etihad Airways’ minority stake will consist of 27.03% from a new share issue by airberlin, funded from operational cash flow, and an existing interest of 2.99% (pre-dilution), which will amount to a total interest of 29.21%. The new shares will be issued at a price of EUR 2.31.


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