EY Says AZ Has Fantastic Potential – If It Embraces Change
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.”