Hogan out at Etihad as strategy changes, threatening thousands of other jobs

There are to be a number of management changes in the airline industry.  Handesblatt is reporting that James Hogan, the chief executive of Etihad Aviation Group, is on his way out, following the carrier’s string of acquisitions in Europe, which have yet to pay off.

Known as a micro-manager and tough boss, Mr Hogan tried to boost Etihad’s position in Europe by buying stakes in Air Berlin, Air Serbia and Alitalia. However, the strategy has led to losses of €2.5bn, with Air Berlin €477m in the red in 2015, according to the German newspaper.

Australian Mr Hogan has led the airline for a decade, following roles at Ansett and Gulf Air.

The airline declined to confirm the newspaper report. A spokesman for Etihad Aviation Group told The Loadstar: “We do not comment on unsubstantiated rumours in the marketplace.”

The news follows a statement this week by Etihad that a number of job losses will occur at the company. A spokesman told The Loadstar that it was not yet clear which parts of the business would be affected, but it is thought some jobs have already gone in Europe.

“Etihad Airways is operating in an increasingly competitive landscape, against a backdrop of weakened global economic conditions,” said the carrier in a 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 organisational reviews and restructuring in different parts of the business in order to reduce costs and improve productivity and revenue.

“By undertaking a process of managed, controlled restructuring we are able to protect the business while at the same time continuing to invest in its future growth and progress.

“The restructuring will also result in a measured reduction of headcount in some parts of the business.”

The carrier said the process would be fair and transparent, and the airline would try to “maximise redeployment opportunities”.

The airline has not specified a number of redundancies, but a source told Bloomberg it could be between 1,000 and 3,000.

It is thought that Etihad will sell off some of its airline acquisitions in Europe as it looks to redefine its strategy – which now includes its partnership with Lufthansa.

The Gulf carriers have been facing stiff competition from each other, and are seeing a significant slowdown in growth. Emirates’ half year results, announced last month, showed a 64% fall in profits to AED1.3bn ($364m). Cargo growth has also slowed, while Etihad has added just one aircraft to its fleet between January and October, while it has also cut some destinations.

The carrier did not respond to requests for comments on what affect the restructuring will have on its cargo business.

Meanwhile, another Middle Eastern carrier is looking for a new head of cargo, The Loadstar understands.