The Etihad Aviation Group Board of Directors today announced that James Hogan will step down as President and Chief Executive Officer of the company in the second half of 2017 in a move seen as confirmation that the Group is rethinking its European investment strategy.
"The Board and management team will continue an ongoing, company-wide strategic review. We must ensure that the airline is the right size and the right shape," said Mohamed Mubarak Fadhel Al Mazrouei, Chairman of the Board of the Etihad Aviation Group. "“We must continue to improve cost efficiency, productivity and revenue. We must progress and adjust our airline equity partnerships even as we remain committed to the strategy.”
“We are very grateful to James. In just ten years, he has overseen the growth of the company from a 22 plane regional carrier into a 120 aircraft global airline and aviation group, with seven airline equity partnerships which together serve more than 120 million guests every year. It is a business which has set new benchmarks for service and innovation. Under his leadership, the company has provided new opportunities for thousands of Emiratis and has been a critical element in the remarkable progress of Abu Dhabi and the UAE. We look forward to James’ continued association with Abu Dhabi in new ways,” he added.
Last month, industry sources told Reuters Hogan's departure could be imminent. Etihad had pursued a strategy to take equity stakes in carriers like Air Berlin, Alitalia and Air Serbia as a way to expand its European network. But the move has delivered little in the way of results as Air Berlin and Alitalia continue to fail at turning a profit.
Regional airlines are also facing a squeeze in revenues. Etihad announced last month it was cutting jobs, with local rival Emirates following a day later in reviewing its workforce as overcapacity and a stronger dollar squeeze earnings.
Hogan's departure was first reported by German daily Handelsblatt, which cited several sources as saying Etihad wanted to start unwinding its European investments in January.
"It is our long-standing policy never to comment on rumour or speculation," Etihad said in a statement at the time.
Hogan was promoted to the Group CEO position in May 2016, which at the time the company had indicated was a widening of his role. In a statement released today, the company "first initiated the transition process last year with the formation in May of the Etihad Aviation Group."
“I am very proud of what we have built together at Etihad and of the company’s substantial contribution to the UAE and to the development of Abu Dhabi," said Hogan in a statement. "The last decade has seen incredible results but this only represents a first chapter in the story of Etihad.”
Hogan will reportedly join an investment company along with Etihad Aviation Group CFO James Rigney, who will also leave the company later this year. A global search for a new Group CEO and a new Group CFO is already underway.