Adria Airways buys Etihad Regional

Adria Airways has purchased Etihad Airways' upscale Swiss arm Etihad Regional through its new subsidiary Adria Airways Switzerland. Etihad Regional was relaunched in early 2014 to attract Europe's business travellers. Under the terms of the deal, the airline will continue to operate under its current legal name Darwin Airline SA with its own air operator’s certificate (AOC), but will change its marketing brand from Etihad Regional 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", Kevin Knight, Chief Strategy and Planning Officer at the Etihad Aviation Group, said. 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". 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 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". He added, "Darwin Airline is well capitalised and solvent, thus able to honour all of its commitments to creditors".

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 of airlines 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.