Etihad Airways Partners - the next airline alliance

Here's where I'd love to say "I told you so!"

A couple of months back, I was wondering if the next airline alliance would actually be an airline - Etihad to be precise. At the time and just before that, Etihad were making investments here, forging a tie-up there, and were essentially all over the place (in a good way). So it comes as no surprise to me that Etihad has today announced Etihad Airways Partners (EAP for convenience), an alliance that isn't termed as one!

EAP is being described as a new brand which brings together like-minded airlines to offer customers more choice through improved networks and schedules and enhanced frequent flyer benefits.

As of now, six airlines are part of the EAP, and they are: airberlin, Air Serbia, Air Seychelles, India’s Jet Airways, Darwin Airline, and Etihad Airways. And Etihad is open to other airlines joining the EAP, whether or not they're part of another alliance. In fact, many of their existing codeshare partners are members of the big 3 alliances - Star Alliance, oneworld and SkyTeam. Also remember, that Etihad already has investments in some airlines that are not yet part of EAP - my guess is that it is only a question of time before they sign up, thus increasing the number of airlines participating in the EAP brand.

Interestingly, the release note also takes a pot shot at the global alliances when it says 

Frequent flyers will benefit from the formation of Etihad Airways Partners as it will remove the complexity and confusion that exists within the global alliances. We’re aiming to deliver a consistent experience for frequent flyers when they travel, as well as a consistent framework for earning and using their miles...This will include standardised mileage and tier benefits across all partners, no blackout periods and priority services. [Emphasis mine]

And one would've thought that global alliances remove complexity and confusion. More important for me is the last parts that I've underlined, which suggests that earning miles across the six current members of EAP could become identical.

I've said it before, and I'll say it again - Etihad has virtually unlimited cash behind them, and will therefore do whatever it takes to route as much of their traffic as possible through Abu Dhabi. Combined with the oil price arbitrage they have, this will enable them to operate EAP like a hub-and-spoke system, with AUH being the central clearing exchange for international passengers of the EAP airlines.

As an aside, it is important to recognise the unwritten rules of competition between Etihad (which is based in Abu Dhabi) and Emirates (Dubai). For the longest time, Dubai has been the touchpoint - both for business and air travel - given its relatively central location across Europe, Africa and Asia, and has generally been the more preferred tourist destination in the Middle East. Etihad, relatively speaking, is an upstart (remember it is only 11 years old) but represents Abu Dhabi in many ways, and is keen to knock Emirates off the top perch.

So, here's what I expect to see coming out of the EAP network:

• more codeshare flights
• possible route rationalisation across airlines in the network, on flights to/from AUH
• streamlined mileage earning and redemption
• some level of status realignment across member airlines
• consistent recognition of status across member airlines
• more international flights with stopovers at AUH
• more deals for stopovers and stays at AUH

What else can you expect from a brand called Etihad? After all, Etihad (or al-ittihad, in Arabic) means Union!