EY Says AZ Has Fantastic Potential – If It Embraces Change

Open Jaw

A key investor in Alitalia, Etihad Airways says it believes Italy’s national airline has “fantastic potential to grow” – but only if it embraces change.

Speaking in Milan to the International Forum of Sovereign Wealth Funds, EY CEO & AZ Vice Chairman James Hogan said AZ was on the verge of collapse last year. “We invested USD 678 million as part of a $2.13 billion restructure of Alitalia,” said Hogan. “Today, we are the largest single shareholder, with a 49% stake. What did we see in Alitalia that nobody else did? A great brand, a great network, but a poor business in need of a new direction.”

Hogan said EY saw great potential for both airlines to grow efficiently by working together. “Partnership offers lower risks, greater rewards and faster outcomes than ‘going it alone’,” he said. “That’s good for Alitalia, good for Etihad Airways, good for Italy and good for consumers.”

Hogan said the carriers had complementary route networks which, combined, offered approximately 200 destinations. He said AZ gained significant new flight connectivity by connecting with EY at its hub in AUH.

For customers, Hogan says benefits included the alignment of inflight product and service, expansion of both carriers’ frequent flier programs and synergy benefits including joint procurement and resource sharing.

Hogan says EY shares AZ Chairman Luca Cordero di Montezemolo’s “clear vision” for the success of the AZ business. “Together, we are working to re-establish the airline to its rightful place as one of the great international brands,” said Hogan.

He acknowledged that obstacles remain. “Alitalia is ascending. But it still faces challenges. It cannot afford to revert to past practices. For Alitalia to survive and thrive, there must be a relentless focus on costs and efficiency, coupled with a commitment to delivering quality, innovation and value for money. Through our partnership, we can achieve success together.”

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