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Etihad to suspend Dallas/Fort Worth route as American cancels codeshare deal

Etihad to suspend Dallas/Fort Worth route as American cancels codeshare deal

The Abu Dhabi airline said the route will become “commercially unsustainable” from March 25, 2018

Abu Dhabi’s Etihad Airways will suspend flights to Dallas/Fort Worth (DFW) from March 25, 2018, it announced on Thursday.

The route is being suspended since it will “become commercially unsustainable following American Airlines’ unilateral decision to terminate its codeshare agreement with the airline,” a statement said.

American announced in July that it would end its code-share agreements with Etihad Airways and Qatar Airways over the airline subsidy row.

US carriers American, United and Delta Air Lines claim Emirates, Etihad and Qatar Airways received around $42bn in unfair state subsidies and have asked the US government to cancel its Open Skies policy with the UAE and Qatar. The GCC airlines have denied all the charges.

Texas-based American Airlines said Etihad and Qatar were given notice about the codeshare cancellation decision on June 29 with the move taking effect with the close of business on March 24, 2018.

Read: Airline subsidy row: US government exonerates Gulf carriers

Peter Baumgartner, Etihad Airways CEO said: “The unfortunate decision by American Airlines to terminate a commercial relationship that benefited both carriers has left Etihad with no choice but to suspend flights between our Abu Dhabi home and Dallas/Fort Worth.

“We are open to American Airlines reversing its decision to cancel our codeshare agreement so that Etihad Airways can continue the route and together protect and support American national interests and global connectivity while driving commercial value for both airlines.”

Etihad said it has “invested heavily” in the DFW route since its launch in December 2014. The route began with three flights a week and was upgraded to a daily service in February 2017.

More than 235,000 travellers have flown on the route since its launch.

Almost half of Etihad Airways’ DFW customers connect on US codeshare flights operated by American Airlines, the statement added.

“The cancellation of the Dallas route is one of several adjustments that we are making to our US network in 2018 in order to improve system profitability,” said Baumgartner.

“Further changes are possible as we monitor the full impact of the American Airlines codeshare cancellation on summer 2018 bookings.”

Also read: US accused of deliberately stifling Gulf airline competition with electronics ban

Etihad currently operates 42 non-stop flights a week to five US gateways – Chicago, Dallas/Fort Worth, Los Angeles, New York and Washington. Etihad Cargo also operates twice weekly Boeing 777F freighter services to and from Rickenbacker International Airport in Columbus, Ohio, and Tucson, Arizona.

Etihad’s decision to drop the Dallas run will not have been an easy one, opined Saj Ahmad, chief analyst at StrategicAero Research.

“Despite the allure of a US Preclearance facility at Abu Dhabi International, flights to Dallas Fort-Worth were not pulling in the numbers Etihad had hoped. That said, given the growth of its fuel efficient 787-9 fleet, there is future opportunity for Etihad to re-examine all of its US touchpoints as the carrier looks to get back into the black after its heavy losses reported earlier in the year,” he said.

“Arguably, suspending the Dallas route makes far more sense than keeping it going at a loss and its moves like this that will eventually bolster Etihad’s financial position.

“With that in mind, it is not out of the realm that Etihad could approach the likes of Southwest Airlines or indeed, another US carrier to see whether the DFW sector could be re-established,” he added.

According to research by Oxford Economics, Etihad contributed $3.8bn to the US economy in 2016, supported more than 30,000 American jobs, and brought 280,000 additional visitors to the country.

These visitors contributed $1.9bn to the US economy and supported an additional 22,000 American jobs.

Etihad is also a major customer of US-based Boeing Company, with firm orders for 71 GE-powered Boeing 787s and 25 Boeing 777Xs, both of which will support the airline’s fleet renewal programme.

All of the airline’s first class seating and The Residence on the Airbus A380 is built by US based aircraft cabin interior manufacturer B/E Aerospace, now part of Rockwell Collins. In 2012, Etihad also signed a deal worth over $1bn with aviation computer technology provider Sabre.

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