The announcement on October 19 that Tony Douglas will step down as CEO of Etihad Airways and take on a ‘consultancy role’ instead, is the strongest indication yet that Douglas will exit the Abu Dhabi carrier for good soon. Douglas has been lured away by Saudi Arabia to create a new, 5-star airline that should rival the Gulf carriers. And who would qualify better for the job than Douglas? Tony Douglas – the man who turned around Etihad.
The imminent departure of Douglas from Etihad comes at a logical moment. Since replacing James Hogan in 2018 as CEO, Douglas has been instrumental to steer the airline through the Covid crisis and its own transformation program, which was launched just before he joined.
The transformation was much needed to make Etihad profitable. Under Hogan, the carrier had expanded quickly in size and costly partnerships. Billions of dirhams or dollars were flowing into alliances with Air Berlin, in which it bought a 29.2 percent stake in 2011. In 2017, the German low-cost airline went bust. In 2014, Etihad bought 49 percent of Alitalia for $1.92 billion, but as losses continued, Hogan said in 2017 he had enough. Etihad walked out, having lost hundreds of millions on Alitalia in just four years.
Enter Tony Douglas, who succeeded Hogan in January 2018. He inherited an airline with a core loss of $-1.6 billion. In his first year 2018, at the helm, Douglas succeeded in cutting the loss to $-1.28 billion. He inherited Hogan’s transformation plan, of which the core was to get rid of its strategic investments in other airlines and fully focus on a leaner and more efficient Etihad instead. Douglas slashed $21.4 billion in aircraft orders, including those for forty Airbus A350-900s.
Etihad further improved its results and reduces its loss to $-0.87 billion in 2019. “The major improvement in 2019 demonstrates we’re clearly on the right track”, he said in the earnings release. “There’s still some way to go but the progress made in 2019, and cumulatively since 2017, has instilled in us a renewed vigor and determination to push ahead and implement the changes needed to continue this positive trajectory.”
Mikael Houari, President of Airbus Africa Middle East, and Tony Douglas at the 2021 Dubai Airshow. (Etihad)
Recording a profit
And then came the Covid years. Etihad parked its entire fleet for three months in the spring of 2020 and resumed flying in June with a skeleton network, heavily relying on cargo. It produced a $-1.7 billion loss, almost the same as in 2016. In 2021, the loss was down to $-476 million, thanks to a very strong second half in which Etihad recovered strongly.
This trend has continued in 2022, with Douglas happily reporting that Etihad recorded a $296 million profit and was performing well on all fronts. “Thanks to our transformation program, Etihad is emerging from the pandemic stronger than ever, with a world-class fleet, an unmatched customer proposition, and sustainability woven into every fiber of our business.“
Sustainability is indeed the other legacy that Tony Douglas leaves behind at Etihad. Under his leadership, the carrier has pushed hard to get sustainability at the core of everything it does to reduce its footprint, be it reducing plastic waste and carbon emissions. In 2019, Etihad introduced the Boeing 787-9 Greenliner (left in the main picture with Boeing’s Stan Deal at the 2019 Dubai Airshow), and this year the Airbus A350-1000 Sustainability50, which have tested numerous initiatives to improve in-flight efficiency.
New owner
As it transformed, so did Etihad’s ownership. In December 2020, the Abu Dhabi state fund that had owned the airline group since day 1, sold Etihad Engineering, Etihad Airport Services Cargo, Etihad Airport Services Ground, Etihad Aviation Training, Etihad Secure Logistics, and Etihad Technical Training to ADQ, an Abu Dhabi based investment fund and holding company. Just this week on October 18, the transaction was approved by the Supreme Council for Financial and Economic Affairs and the ownership of Etihad Airlines Group (EAG) was transferred to ADQ.
A day later on October 19, ADQ appointed Antonoaldo Neves as the airline’s new CEO, joining Etihad with a history as CEO and Board Member of TAP Portugal and Azul Airlines before that. Douglas, the press release said, “has decided to pursue an opportunity elsewhere, and will serve during his transition period as an advisor to the Board of ADQ Aviation and Aerospace Services Company.”
“I am proud to have served as Etihad’s chief executive officer over the past five years”, Douglas is quoted. “The unprecedented challenges stemming from macro-economic conditions faced by the industry were successfully navigated through prudent measures undertaken to position Etihad on a sustainable path for the future.”
Etihad Chairman Mohammed Ali Al Shorafa thanked Douglas for his efforts: “Tony has led Etihad through some of its most challenging times and has successfully turned the airline into a profitable and sustainable business over the past five years as part of its initial transformation program. As we are entering our next phase of sustainable growth, we are confident that Antonoaldo will build on Tony’s legacy. We thank Tony for all the hard work he has delivered.”
Saudi Arabia
It was this summer when the first reports emerged that Douglas had been poached by the Saudi Public Investment Fund to lead the new airline, which unofficially has been branded RIA. In line with the country’s Vision 2030 to boost tourism and traffic, RIA should become a high-quality second national airline besides Saudia, which has been in business since 1945. PIF is reportedly investing $30 billion in the new airline, which is expected to launch modestly with a narrowbody fleet and regional operations. Arabian Business reported that RIA is also trying to lure away two other Etihad executives.
Billions of RIyals, really? Etihad is a UAE company which uses the UAE currency (Dirhams AED). Please get your facts right!
My mistake! I should have known better as a frequent visitor of the UAE. The error has been corrected