Abu Dhabi’s Etihad, China Eastern form joint venture to boost growth

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Etihad Airways and China Eastern have agreed to form a joint venture to develop and grow the routes between UAE and China as the Abu Dhabi flag carrier looks to boost growth.

The airlines will together manage flight capacity on chosen routes, coordinate schedules and share revenues but it will involve no equity investment or cost-sharing, Antonoaldo Neves, the CEO of Etihad Airways told Reuters.

“The venture will allow Etihad and China Eastern to offer travellers enhanced travel options and exceptional value. We are confident the venture will unlock a new era of travel opportunities while boosting economic growth in Abu Dhabi and the UAE,” Neves said in a statement.

The commercial venture will be implemented in early 2025 when the two carriers secure governmental approvals. Joint ventures between commercial airlines are common between European and American airlines but this is set to be the first such partnership between the Middle East and China.

Neves stressed that Etihad is actively seeking more such opportunities globally.

Etihad and China Eastern will introduce full reciprocity to their existing frequent flyer programmes in Q4 2024, allowing passengers to seamlessly earn points and redeem rewards when flying with either airline.

Abu Dhabi wealth fund ADQ-owned Etihad reported a quarterly net profit of $143m (Dhs526m) in Q1 2024, up from Dhs59m for the same period a year earlier, driven by a robust increase in passenger revenue and reduced net finance costs.

The airline carried 4.2 million passengers in the January-March period, while passenger revenue came in at Dhs966m, up 25 per cent from the previous year. Its revenues in the first three months of the year increased by Dhs987m to Dhs5.73bn, up 21 per cent compared to Dhs4.75bn in Q1 2023, helped by growth in network capacity and a 41 per cent increase in passenger numbers.

Meanwhile, ADQ added banks to Etihad’s planned initial public offering (IPO) in May and the listing is expected to fetch as much as $1bn.

The carrier picked Abu Dhabi Commercial Bank, Bank of America, BNP Paribas and Morgan Stanley as joint bookrunners on the potential share sale that is reportedly scheduled for the end of the year.

Etihad’s listing would be the first privatisation of a major legacy airline in the GCC region.

Read: Riyadh Air partners with Singapore Airlines, Air China to grow network