Etihad sets sights on South America

United Arab Emirates (UAE) national carrier Etihad Airways is keen to expand its footprint in South America, according to its President and Chief Executive Officer, James Hogan. He confirmed to The HUB that the airline is currently in discussions with South American-based carriers about potential commercial partnerships as part of its global business model of establishing work arrangements with other operators.

Etihad Airways currently has 38 codeshare partnerships with airlines around the globe, resulting in a combined network of 323 destinations, which is more than any other Middle Eastern airline. Beyond its own organic growth, codeshare partnerships and equity stakes are a significant and growing part of the airline’s expansion strategy. Etihad Airways holds a 30 per cent stake of airberlin, 40 per cent of Air Seychelles, 3 per cent of Aer Lingus and 10 per cent of Virgin Australia.

The airline will launch its first route in South America on June 1, 2013, with daily non-stop flights between Sao Paulo, Brazil and its home base of Abu Dhabi, the capital of the UAE. Etihad Airways’ service will also provide connections from Brazil to the airline’s global network, offering connectivity over Abu Dhabi to markets in the Gulf Co-operation Council, the Indian Subcontinent and Asia.

Mr Hogan spoke of the significance of the new route, in particular the economic impact: “Brazil is one of the fastest growing economies in the world, now ranking as the sixth largest since overtaking the UK in 2011. Bi-lateral trade between Brazil and the UAE is valued at nearly US$3 billion annually, with authorities aiming to lift this to US$10 billion within five years.”

“There are 25 major Brazilian companies with offices in Abu Dhabi. Mubadala, the development company of the Government of Abu Dhabi, last year signalled its intent to begin investments in Brazil, valued at up to US$13 billion,” he added.

According to the Arab-Brazilian Chamber of Commerce, Brazil trade volumes with the Arab world grew by 28 per cent in 2011 to reach US$25 billion. This is forecasted to grow by a further 10-15% this year.

“In addition to supporting the growing ties between Brazil and the Middle East, this new route complements Etihad Airways’ recent expansion in North Asia, including the recent introduction of services to Chengdu and Shanghai and the upcoming increase to daily Tokyo services with connections to Nagoya from April 2013,” said Hogan. “With some of the fastest connecting flight times to China and Japan, Brazil’s largest and fifth largest trade partner, respectively, Etihad Airways is providing vital air links between the world’s major emerging markets.”