Tony Douglas, GCEO of Etihad Aviation Group
On Monday June 13th, I had the honor to interview Tony Douglas. Mr. Douglas is the Chief Executive Officer of Etihad Aviation Group. He has over 32 years of experience in the aviation industry working for British Aerospace Company, London Heathrow Airport, Abu Dhabi Ports Company, Abu Dhabi Airports Company, and Etihad Airways. Previously he served as CEO of the Defense Equipment and Support department for the UK Ministry of Defense, where he was responsible for procuring and supporting all the equipment and services for the British Armed Forces. This interview has been edited for length and clarity.
Joshua Kupietzky: How did you start your career in the aviation industry?
Tony Douglas: I entered the aerospace industry in 1990 when I started working with British Aerospace, now better known as BAE Systems. My love affair started from there, and before I knew it, I was with BAA, the world’s largest airport operator at the time. I spent 10 years with BAA in various positions. I was responsible for building a lot of the major infrastructure at the time, and a career highlight was handling the opening of Terminal 5 as the Chief Executive of Heathrow. It was an absolute privilege given that 68 million people pass through Heathrow every year, that’s more than the population of the UK.
JK: Etihad is predominantly a hub carrier which means you have to have lots of synchrony with your hub airport, Abu Dhabi International Airport, but what are the dynamics? And when Etihad begins growing again, how confident are you that your hub airport can keep the pace with you?
TD: With Abu Dhabi International Airport serving as our global hub, we work very closely with the airport operator to coordinate and align our operations with a shared objective of serving Abu Dhabi and our guests safely and efficiently. I myself sit on the Abu Dhabi Airports Company (ADAC) Board and previously held the role of CEO of Abu Dhabi International Airport, so I personally have an intimate knowledge of the operation, while our respective teams and Abu Dhabi operations are inextricably intertwined. Being located at the crossroads where East meets West, the long-term outlook for Etihad and the strategic positioning of the UAE are intrinsically linked. Our hub is a six-hour flight from 80% of the world’s population, providing easy access to passengers from less connected markets to a global network of destinations from the US to the Far East and Australia.
Operations aren’t far off pre-pandemic levels, in Q1 2022, we were operating to 81% of the destinations we flew to in 2019. It feels great to be rebuilding air connectivity to the vibrant capital of Abu Dhabi and to be tapping into pent-up travel demand.
JK: Etihad, like all carriers, has retooled its network since the start of the pandemic. What has worked and what hasn't? Do you see your network targeting more business or VFR (visiting family and relatives) travelers as you continue to emerge from the pandemic? What lessons has the pandemic taught you about its network and the mix of leisure and business travel?
TD: With most markets now operating with fewer restrictions, it's clear that we’re well on the road to recovery. Although we expect some hiccups along the way, the industry’s pace of recovery is continuing to accelerate. We have a strong network spanning major cities in Asia, Australia, Europe, the Middle East and North America, which has continued to grow as destinations have reopened and travel demand returned. We have also become incredibly agile from a network planning perspective, acting fast to add new destinations where we see demand and opportunity.
Company restrictions on corporate travel are starting to be lifted so we have seen corporate travel pick up over the last quarter, however premium travel is still being driven by leisure travelers. In fact, we are actually seeing a higher proportion of leisure travelers flying in premium cabins than we did before the pandemic started. There have also been other opportunities which we have been able to capitalize on. Dubai’s EXPO 2020 was extremely successful in bringing visitors to the UAE and we are also looking forward to bringing people from across the globe to the World Cup in Qatar later this year.
JK: Etihad’s growth certainly has been profound up until now. During your tenure, which global airline has or still does concern you most or do you most respect?
TD: I believe that there is more than enough room for everyone in the industry. Our collaboration with Air Arabia is the perfect example of how two airlines can complement each other and benefit from a larger demographic of passengers.
JK: Etihad heavily invested in an alliance strategy (between Etihad, Air Berlin, and Alitalia) in which, Etihad bought significant stakes in both Air Berlin and Alitalia. The strategy was designed to fast-track network growth for Etihad, but in 2017, losses spiraled at Air Berlin and Alitalia. Etihad faced heavy losses and was forced to restructure. Do you believe this restructuring helped Etihad survive the pandemic?
TD: Prior to the pandemic, Etihad was already committed to a well-advanced transformation programme to turn the business into the right size and shape for sustainable growth over the long term. Towards the end of 2019, we were ahead of our projections and at the start of 2020, we had one of the best first quarters in history – then the COVID-19 pandemic struck. While we have now revised our outlook based on current realities, we will continue with our programme to transform the business for sustainable growth over the long term and will continue to deliver on our mandate to support the economic development of our home, Abu Dhabi.
JK: Etihad has invested in many carriers such as Air Serbia, Virgin Australia, and Air
Seychelles. Currently, are there any airlines you are looking to invest in? What are the
most critical metrics you look at before investing in an airline?
TD: Currently, we are focusing on our joint venture with Air Arabia Abu Dhabi and building on our codeshare network by strengthening existing agreements with key partners. We believe there is promising untapped potential in the low-cost carrier market for Abu Dhabi, especially in terms of stimulating inbound tourism and diversifying our market mix. Air Arabia Abu Dhabi – the capital’s first low-cost carrier - is perfectly positioned to cater to this segment and has continued to go from strength to strength. It was a natural choice for our joint venture, and they bring a huge level of experience to the table. Being based in the UAE, they have an intimate knowledge of our primary point-to-point markets, and the world-class tourism offering that makes Abu Dhabi special.
JK: What do you consider your greatest achievement in the airline industry?
TD: When I took the role at Etihad, I knew the transformation programme was going to be a real challenge. I hadn’t envisioned it being amplified beyond belief by the pandemic. It was a really tough time and the fact we had to downsize was heartbreaking in all manner of ways.
In saying that, the Etihad family’s sense of unification during this uncertain time was an incredible achievement that we can all be proud of. During the most difficult times human nature can still surprise you, and I am extremely lucky to be surrounded by such an incredible team.
JK: What are your goals for Etihad Airways, short- and long-term?
TD: Sustainability has long been a top priority for Etihad, and even throughout the past two years of challenges we’ve experienced as a result of the pandemic, we have made great leaps forward.We’re on a mission to achieve net zero emissions by 2050 and halve 2019 emissions by 2035.
The path to net zero is made up of a million little things. The big three - operational efficiencies, SAF and offsets - are the most effective umbrellas, but this needs to be underpinned with sustainable financing, research and development (through programmes such as our Greenliner and Sustainable50), and industry collaboration.
JK: What do you anticipate happening to the airline industry in the next decade? What would you like to see happen?
TD: If you are referring to passenger numbers, I think over the next 10 – 20 years, global air passenger growth could be in the 3.2% to 5.3% range annually, to potentially double 2019 passenger demand by 2039. The biggest challenge to commercial aviation in the future is the commitment that’s been made to net-zero carbon by 2050. I am confident the industry will come together collectively to tackle the sustainability goals we have pledged to make.
JK: We started this interview talking about your background in the aviation industry. What advice do you have for young people trying to start a career in the aviation industry?
TD: Take the time to listen and allow yourself enough time to digest what you have been taught so you can build a level of competence to grow personally and professionally. This is still relevant to me, even today. I would also advise you to find yourself a mentor, I was really privileged to have three incredible mentors who I could reach out to for guidance and advice.
