Etihad CEO Antonoaldo Neves on strategy and its surprise move into Charlotte
After years of struggle before and after the pandemic, Abu Dhabi-based Etihad has returned to profitability and is growing substantially. Recently, the airline surprised nearly everyone by announcing it will begin Charlotte service next May. Airlines editor Robert Silk spoke about the decision with Etihad CEO Antonoaldo Neves at the IATA Annual General Meeting in New Delhi this month.
Antonoaldo Neves
Q: Why Charlotte?
A: It's such a big, underserved market. There's no airline flying from the Middle East to Charlotte. There's a lot of immigration to the Carolinas today. We are really excited. We think it's a unique value proposition.
Q: Your partner American dominates that airport. Clearly codeshare business will be key for you there, right?
A: Every time we have interline and codeshare it does help. But we also have markets in the U.S. where customers on codeshares are less than 5%. I'm not going to name the cities. But in the U.S. it ranges from 5% to 25%. Charlotte may be 5%. We don't know.
Q: I read that even Charlotte Airport didn't know you were going to fly there until a couple days before your public announcement. How come? There was speculation that you made the decision because Donald Trump was in the region at the time.
A: We have a seven-year plan for our destinations. Charlotte was there for the past 3.5 years. Mr. Trump's visit to the United Arab Emirates was a good marketing opportunity for us. So, we could have announced in March next year. And that was the plan. But my team told me, "Why not anticipate?" In the end, if we get some news coverage because of this for free, why not? We were planning to start negotiations with Charlotte Airport by the end of this year. But we called them and said, "Look guys, we need to do this because we believe there is a marketing opportunity." That's business, right? We need to take all the opportunities that we have to market and sell tickets.
Q: You launch Atlanta flights on July 2. And you started Boston last year. After your previous U.S. peak in 2017, you had dropped Los Angeles, Dallas and San Francisco. Once you add Charlotte, you'll be back to six U.S. routes. Tell us about your U.S. strategy.
A: Because we have U.S. Customs Preclearance in Abu Dhabi, we are in the unique position to offer people in the Gulf Cooperation Council, India and Southeast Asia, and to Americans, an amazing experience. Think about Boston: Many of our customers connect beyond Boston with our partner JetBlue; you don't have to pick up your bag. We'll move to about 40 weekly frequencies to the U.S. next year. That's nothing. When I was at TAP Portugal, we had about 20 to 30 weekly frequencies to the U.S. Today, if I'm not mistaken, they have weekly 80. I believe Etihad can get there one day, but we need to do it differently. But I don't see any reason we can't double capacity to the U.S. in the next five years.
Q: How many new destinations would you anticipate in those five years?
A: Maybe three to five.
Q: How do you position yourself within a market with stalwarts Emirates and Qatar Airways as well as ambitious potential rivals in Saudi Arabia, even India?
A: We are proud of the work we have been doing. The average global net margin is 3%. Last year we did 6%. But we want more. I see Emirates doing 15%. Qatar doing 9%. I want to get 10%, 12%, 15%. I need to have muscle to fight downturns and competition in the future. The market is growing so much in the region that I believe there is space for everyone to make money. We grew 25% last year. If we have a stronger carrier, we can grow the pie, and at the same we can be ready to fight if the pie's not growing.
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