Etihad Aviation Group’s ongoing review of its airline investments has led to the disposal of its shareholding in Swiss-based Darwin Airline.
The move to sell its one-third stake in the Lugano-headquartered regional airline comes at a time of leadership change at Etihad, with James Hogan departing as chief executive at the start of July and a permanent successor yet to be appointed.
While Darwin Airline, which operates as Etihad Regional, is the first investment the company has decided to sell as part of the strategic review, in 2015 Etihad relinquished its stake in Aer Lingus when the Irish flag carrier was acquired by International Airlines Group, the parent company of British Airways and Iberia.
Etihad Aviation Group chief strategy and planning officer Kevin Knight said in a statement: “The decision to sell this minority stake in Darwin is a result of the on-going strategic review of our investments and a decision to concentrate on our other partnerships.”
“We wish everyone at Darwin well in the future.”
The review of the business comes at a tricky time for not just Etihad but all the Gulf-based carriers, given the slowdown in the region amid difficult trading conditions and overcapacity.
In recent times, Etihad has indicated it was looking at new ways to improve it financial position. The airline has signed a codeshare agreement with German flag carrier Lufthansa, which although small in scope to begin with, had the potential to grow into something bigger.
The strategy of spending billions of dollars to buy up stakes in foreign carriers that began in 2011 was a hallmark of Hogan’s time as in charge of Etihad.
The Australian-born executive, who was recognised for his achievements in aviation in the recent Queen’s Birthday Honours list by being admitted as an Officer of the Order of Australia (AO), was chief executive of Etihad Airways between 2006-2016, before stepping away from the day-to-day stewardship of the airline in May 2016 to spearhead the wider Etihad Aviation Group following a corporate restructure.
While some investments have found a degree of success, others have been continued to suffer hefty losses, such as airberlin, or are on the brink of financial collapse, such as Alitalia.
Etihad, which serves Brisbane, Melbourne, Perth and Sydney from its Abu Dhabi hub, owns about 20 per cent of alliance partner Virgin Australia.
The company is currently being led by an interim chief executive, Ray Gammell. In May, Etihad Aviation Group said an announcement for a new boss was expected “in the next few weeks”.
Etihad and the other existing owners have sold their stakes in Darwin Airlines to Slovenia-based Adria Airways.
Darwin Airline will be rebranded Adria Airways Switzerland and maintain its own air operator’s certificate (AOC) and stay headquartered in Lugano.
“Adria Airways, with its extensive expertise, its strong route network, especially in the Southeast European market, will be very beneficial not only to the future of Darwin but also to the Ticino region we serve, which needs good connections with the rest of Switzerland and throughout Europe,” Darwin Airline chairman Emilio Martinenghi said in a statement.
“Darwin Airline SA is well capitalized and solvent and able to honour all its obligations towards its creditors.”
The terms of the sale were not disclosed.