Etihad Aviation Group confirmed Tuesday that CEO James Hogan and CFO James Rigney will leave the company in the second half of the year. Hogan, a high-profile industry figure and long-time fixture as head of Etihad, prepares to leave as financial difficulties at several of the airlines in which the company holds large stakes weigh on the profitability of the Abu-Dhabi based carrier. In a statement, Etihad said the Board and Hogan began the “transition process” last year with the formation in May of the Etihad Aviation Group, which now serves as the parent company of Etihad Airways.
“To position the company for continued success in a challenging market, the board and management team will continue an ongoing, company-wide strategic review,” said Etihad group chairman Mohamed Mubarak Fadhel Al Mazrouei. “We must ensure that the airline is the right size and the right shape.”
Al Mazrouei’s comments effectively confirm that the airline has begun to reassess some of its equity partnerships. The airline holds stakes in Air Serbia, Air Seychelles, Air Berlin, Alitalia, Etihad Regional, Jet Airways and Virgin Australia. Last month Etihad Airways unveiled plans to create a new European leisure airline group in a joint venture with TUI AG. It also announced new codeshare agreement with Lufthansa and an aircraft leasing agreement between Air Berlin and Lufthansa. Meanwhile, it stressed that it remains an active participant in the next phase of Alitalia’s restructuring plan.
“We must continue to improve cost efficiency, productivity and revenue,” added Al Mazrouei. “We must progress and adjust our airline equity partnerships even as we remain committed to the strategy.”
Asked by AIN last month to confirm reports of Hogan’s eventual departure, an Etihad spokeswoman said the airline does not comment on “unsubstantiated rumors in the marketplace.” However, she did concede that the airline had begun to undergo organizational reviews and a “controlled restructuring” that would result in a “measured reduction” in headcount throughout the organization.
“Etihad Airways is operating in an increasingly competitive landscape, against a backdrop of weakened global economic conditions,” the airline said in a written statement. “To ensure we remain agile and competitive in this environment, we constantly explore and pursue new ways of driving productivity and improving efficiency so that we can continue to deliver on our mandate and vision. This involves an ongoing process of organizational reviews and restructuring in different parts of the business in order to reduce costs and improve productivity and revenue.”