Rumors are swirling that Etihad Airways will ditch American Airlines and partner with United Airlines. What will this mean for all three carriers?
It was two years ago that rumors were swirling that Etihad was close to joining Star Alliance. At the time, I confirmed with several sources that the talks were serious. Early 2017 was a very different time for Etihad; a time before the carrier restructured and entered a long-term cutback mode. But as the year progressed and the losses mounted (mostly through miserable investments with partner carriers), talks fizzled. New rumors have surfaced, as reported by One Mile at a Time, that Etihad will abandon its partnership with American Airlines and partner with United Airlines.
What This Means For Etihad Airways
First, let’s talk about what this new partnership would mean for Etihad. Despite the blockade of Qatar, Etihad finds itself in a weak third position behind Emirates and Qatar Airways. While a merger with Emirates may seem to make the most sense, as I wrote about last year, there are economic and political reasons (not to mention pride) why that may not occur.
> Read More: Emirates Firmly Dismisses Rumor Of Etihad Merger
The relationship between Etihad and American has soured since American unexpectedly terminated its codeshare agreement with Etihad in 2017. A new and more willing U.S. partner could very well help the embattled carrier regrow its scaled-back U.S. market. A partnership with United might mean a resumption of service from San Francisco and a shift from New York Kennedy to Newark.
Importantly for Etihad, a new strategic partnership and potential membership in Star Alliance would represent a stabilizing force and potential source of revenue and smart growth. Frankly, Etihad needs United and Star Alliance more than either needs Etihad.
What This Means For United Airlines
Now, let’s talk about what this partnership would mean for United. United is not going to be crazy about Etihad suddenly serving all or most of its hubs. It wants the transatlantic or transpacific traffic for itself or its joint-venture (JV) partners, not Etihad. At the same time, outside of New Delhi, Mumbai, and Tel Aviv, United is weak in the Middle East and Indian subcontinent.
It would surprise me if United wanted to cooperate with Etihad on Indian routes, even if it meant domestic United feeder flights to/from Etihad U.S. gateways. United just announced new service from San Francisco to Delhi and it is a safe assumption United would rather fly passengers on its own metal to DEL or BOM with a domestic or regional connection on Air India. Even flying passengers to Frankfurt then connecting them on a Lufthansa flight to other larger Indian cities seems to make more sense than flying them via Abu Dhabi just to pick up a domestic codeshare.
But what about the Gulf? There are so many nations that United neglects that could be nicely served via a partnership with Etihad Airways. Who knows, since Etihad cut its Dallas flight, maybe United would start a Houston to Abu Dhabi flight and feed Middle East flights itself.
Now on the redemption side, the addition of Etihad Airways would be a huge score for United MileagePlus members. While Etihad is not as generous as it once was with premium cabin award space, with enough flexibility you can often secure truly aspirational award seats. The ability to use your Untied miles for Etihad flights and mix and match those flights with United’s Star Alliance and other partners would greatly enhance the value of your United miles.
What This Means For Star Alliance
Star Alliance has no Middle East partner right now. Oneworld has Qatar Airways while SkyTeam has Saudia and Middle East Airlines. While Lufthansa and Air India serve a handful of Gulf destinations, Eithad would be a nice fit for Star Alliance.
In 2017, Lufthansa and Etihad formed a closer relationship. If United and Etihad also formed a relationship, the two largest Star Alliance members would already be working with Etihad.
> Read More: Etihad and Lufthansa Announce Closer Partnership
We may see Etihad join Star Alliance as a “Star Alliance Connecting Partner” rater than a full member. See below for more about that program.
> Read More: Will Low-Cost Carriers Join Star Alliance?
What This Means For American Airlines
Finally, let’s talk about what this partnership would mean for American. In short, bad news.
By so needlessly attacking Etihad, American damaged a relationship that need not have been damaged. While United serves New Delhi and Mumbai and once served Bahrain, Dubai, and Kuwait, American pulled out of the Indian market several years ago. A partnership with Etihad only benefited it, since American customers faced an annoying connecting in London when traveling to India and American dissolved its partnership with Jet Airways. A closer partnership with Etihad could have funneled so much domestic traffic on American to an Etihad gateway, benefiting both carriers.
If American and Etihad part ways, the AAdvantage program will become even less valuable. American has lost so many partners over the last few years while adding none. The addition of Royal Air Maroc, which is coming, will represent the first addition in many years.
We should know in the days ahead whether Etihad will be leaving American for United. Should this occur, I expect AAdvantage members will have at least a few weeks to redeem their miles on Etihad, but this is not something you should procrastinate. If anything, remember that American allows complimentary date changes on award tickets. I have an Etihad award booked myself (more on that later).
This is big news. Although just a rumor now, the link up between Etihad and United would be a very interesting development.
What do you think about Etihad partnering with United and joining Star Alliance?