Etihad accelerates reset as interim CEO takes reins immediately

[LONDON] Etihad Aviation Group accelerated its strategic reset by naming an interim chief executive officer to take the reins from James Hogan, the architect of the carrier's costly bets on ailing Alitalia SpA and Air Berlin Plc.

Ray Gammell, the Abu Dhabi-based group's chief people and performance officer, will assume "full management responsibilities from today," Etihad said in a statement on Monday. That means Mr Hogan effectively has no official role.

His departure is now set for July 1, the earliest possible date after the company previously said he'd leave some time in the second half. Etihad said the move was "consistent" with its management transition plan.

With Etihad still searching for a permanent CEO, the sudden management handover suggests urgency on the part of its state owners to proceed with a reevaluation of the group's direction, especially its so-called Equity Alliance strategy.

Under Mr Hogan, who ran the airline for more than a decade, Etihad took minority stakes in mostly under-performing airlines in an effort to turn them around while feeding more traffic through its Abu Dhabi hub.

Mr Gammel will continue Etihad's strategic review aimed at repositioning the business for "a prolonged period of challenges for global aviation," chairman Mohamed Mubarak Fadhel Al Mazrouei said in the statement, adding that a new permanent CEO is expected to be named in a few weeks.

Mr Hogan devised the acquisition plan as the company sought to catch up with larger Gulf rivals Emirates and Qatar Airways Ltd.

While some of its investments have shown a profit, Alitalia filed for bankruptcy last week amid mounting losses and a lack of funds. Hours after the Italian carrier's insolvency, Air Berlin Plc revealed that Etihad granted the German company financial support for at least another 18 months, including 350 million euros (S$537.7 million) of new funds.

Mr Gammell, an Irishman, joined Etihad in 2009 after working at Intel Corp. and Royal Bank of Scotland. His main responsibility was recruiting more Emiratis into Etihad's workforce.

In addition to his appointment, the company named Ricky Thirion, currently senior vice-president of group treasury, as its new chief financial officer. He is replacing James Rigney, who is also leaving on July 1. The departures of both Rigney and Hogan had already been announced by the airline.

BLOOMBERG