Etihad was late to the party, will it be the first to leave?

Etihad, is registered to Abu Dhabi, which is just one of the seven states that form the United Arab Emirates.  Ajman, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain, plus of course Dubai, are the others.

Dubai is home to mega-airline Emirates and it has to be said that with Qatar just down the road, regional competition has been brutal.

Dubai based Emirates has run off with the majority of the business share, and Qatar – especially under the current situation with the blockade, isn’t letting up for a minute and it has a vast fortune in reserves to keep up the pressure.

Etihad is much smaller than both its immediate competitors, it’s made some terrible investments which have really hurt it and left its management shaky at best if not almost in turmoil, as it tries to settle down to the new order.

Etihad’s equity partner schemes with Alitalia, verging on bankruptcy when Etihad pulled the plug, Air Berlin, going bankrupt and ceasing operations at the end of this month, again, because Etihad pulled the plug on any more financial support, have left it smarting and hundreds of millions of dollars out-of-pocket. Add to that embarrassment and humiliation – neither of which play well in Arabic business circles – have in many ways emasculated it.

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Then along comes Sir Tim Clarke, a man who looks like everyone’s kindly grandfather, but runs a massively successful airline in Emirates. And what does he say casually in one of his interviews?

He told Reuters that he sees the possibility of working closely with Etihad on procurement and running their business along the lines of AirFrance-KLM.

It’s not much of a sentence. And yet it’s earth shattering for both airlines. One, is in effect saying to the other, we’ve won, there’s a place for you, but we do it our way because you clealry can’t run an airline as well as we can. And the biggest news? Etihad didn’t rule it out.

An AF-KLM type arrangement would suit them both, centralise procurement but maintain cultural and national differences, and it would save face, something that matters more than many westerners realise.

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