Adria Airways has purchased Ethiad Airways’ upscale Swiss arm Ethiad Regional through its new subsidiary Adria Airways Switzerland. Ethiad Regional was relaunched in early 2014 to attract Europe’s buisness travellers. Under the terms of the deal, the airline will continue to operate under its current legal name – Darwin Airline SA, with its own AOC, but it will change its marketing brand to Adria Airways Switzerland.
“The decision to sell this minority stake (33.1%) in Darwin is the result of our current strategic review of our investments and the choice to focus on our other partners”, said Kevin Knight, Chief Strategy and Planning Officer at the Etihad Aviation Group.
Other shareholders have also sold their stake in the business to Adria, which now has 99.1% ownership in the airline. The remaining 0.9% will be acquired shortly. The value of the transaction has not been disclosed, but is being financed by Adria’s owners 4K Invest. The parties involved have agreed to maintain confidentiality.
In a statement, Adria Airways’ CEO, Arno Schuster, said, “Darwin is an excellent airline with experienced management and staff. Extending our network and, consequently, optimizing cost structures will create a win-win situation for both carriers. Our experienced commercial department will market Darwin’s flights under the brand name Adria Airways Switzerland”.
The President of Darwin Airline’s Board of Directors, Emilio Martinenghi, said, “Adria Airways, with its extensive expertise, its strong route network, especially in the Southeast European market, will be very beneficial not only to the future of Darwin but also to the Ticino region we serve, which needs good connections with the rest of Switzerland and throughout Europe”.
Chairman of the Board of Lugano Airport, Emilio Bianchi, said, “Clearly we are losing one partner (Etihad), but it’s good that there is a company that will replace them. Adria Airways is a very serious company and has a very good reputation”. He added, “We need to understand their strategy. We will have the opportunity to meet the new heads of the airline in due course, but this seems to us as positive news. It proves that there is still some interest in regional airlines, which are very important for an airport like ours”.
Adria’s Chief Financial Officer, Heinrich Ollendiek, will become the new CEO of Adria Airways Switzerland. The airline will retain its bases in Lugano and Geneva. Adria Airways will take over some of Darwin’s administrative and operational tasks and will market the Swiss airline’s services.
The parties involved have agreed to maintain confidentiality on the terms of the sale transaction. Darwin made a small profit in 2016 and has a positive outlook for the current year.
Darwin Airline was founded in 2003 with the prime aim of connecting the southern part of Switzerland, the Ticino, and its economy with the country’s main Zurich and Geneva financial centers and airline hubs. Following the acquisition of 33.3% of its shares by Etihad Airways, Darwin joined the Etihad Group in 2014 and adopted the Etihad Regional marketing name. It uses a fleet of six fifty-seat Saab 2000 turboprop aircraft, as well as four ATR 72s, which are currently being operated on behalf of Alitalia. The airline runs flights across Europe, offering passengers direct connections to dozens of major cities. It also taps into a half-dozen points served by Etihad and its codeshare partners Air Berlin and Air Serbia. Etihad’s sale of its stake in Etihad Regional represents its first divestment since launching a company-wide strategic review last year of its shareholdings in other carriers. When launching Etihad Regional in January 2014, the former Etihad CEO, James Hogan, described the deal as “a step-change” for the business.
4K Invest, a turnaround fund from Munich, signed a contract for the purchase of a 91.58% stake in Adria Airways at a price of 100,000 euros early last year. It later bought the remaining stake in the Slovenian carrier in order to secure 100% ownership. The transaction marked its first investment in the aviation sector. Since its purchase of Adria, 4K has brought in several new aircraft, boosted the airline’s flight network, closed the carrier’s base in Poland, ended a commercial cooperation agreement with Estonia’s Nordica and has attempted to reduce the company’s losses. However, it is yet to publish Adria’s 2016 financial report. Late last year, Adria named Captain Tiziano Ponseggi, the former Director of Operations at Etihad Regional, as its new Chief Commercial Officer.
Featured photo by Konstantin von Wedelstaedt via Wikimedia Commons.