DUBAI/MILAN/PARIS: The naming of a new boss at Etihad Airways presents the Gulf carrier with an opportunity to rethink its aggressive expansion strategy after the failure of minority-owned Alitalia underlined the big barriers to global growth. Ray Gammell was appointed interim CEO this week, days after Alitalia sought bankruptcy protection with $3.3 billion of debt. He replaces veteran boss James Hogan.
Hogan’s strategy was to buy up minority stakes in myriad airlines but the struggles of that strategy, most recently with Alitalia, are emblematic of a quandary peculiar to the industry. The path to growth for airlines often lies in gaining access to rivals’ routes. Yet in the EU, which mainly operates as one nation in aviation, foreigners cannot majority-own an airline. At Alitalia, the lack of full control meant that Etihad could not deal effectively with labor problems.
Since 2011, Abu Dhabi’s state-owned Etihad has spent billions of dollars buying minority stakes from Europe to Australia as it races to catch up with regional rivals Emirates and Qatar Airways.
Alitalia was Etihad’s eighth and most high-profile bet. But the €560 million ($609 million) investment lies in tatters, placing Hogan’s wider strategy under the microscope after staff overwhelmingly rejected its latest restructuring plans. Now the future of Etihad’s other leading investment, in Air Berlin, is also in doubt as the Gulf carrier pursues a strategy review that began last year. Like Alitalia, the German carrier has made big losses and it said two weeks ago it was seeking a new partner, which could include a new investor.
An Etihad spokesman said its review was ongoing but declined to comment on how its strategy might change or the impact of Alitalia’s failure on its global plans.
But a senior source at the Gulf carrier said lessons would be learned from the Italian investment and they would play a role in shaping future strategy.
Etihad’s strategy has allowed it to cut costs by pooling items like airplane procurement while offering a larger network; it says it brings together 600 destinations and over 700 aircraft.
Hogan’s “approach to partnerships did not pan out, but a few of his principles are still valid,” said Will Horton, a senior analyst at Australian aviation consultancy CAPA.
Etihad’s efforts to grow through minority stakes have at times been compared to Swissair’s failed “Hunter” strategy of the 1990s. Swissair’s buying binge, often acquiring stakes in ailing airlines, contributed to huge losses which eventually saw it grounded in 2001 and sold to Germany’s Lufthansa in 2005.
Hogan has always rejected the comparison, saying Etihad was doing things differently to Swissair and had demonstrated it could control costs. Etihad and its rivals have demonstrated spectacular growth but are increasingly pressured by a slowing Gulf economy due to relatively low oil prices. They have chosen different strategies to sidestep the regulatory dilemma governing foreign ownership and pursue global expansion.
Qatar Airways, like many other carriers, has entered one of three global alliances. These give some access to other carriers’ traffic rights without breaking ownership rules but allow only limited control over route-planning and costs.
Dubai’s Emirates, by contrast, mainly operates alone — an approach that gives it control of over its network and costs but also means it carries all the risk. The Middle East’s largest airline reported a drop in annual profit on Thursday for the first time in five years.
As the youngest of the three major Middle Eastern carriers, 14-year-old Etihad has looked to catch up and followed a third path of buying into other airlines to expand its reach.
When Hogan rescued Alitalia in 2014 after months of negotiations, he had been encouraged by two reformist prime ministers, Enrico Letta and his successor Matteo Renzi. Letta flew to Abu Dhabi to help clinch the deal.
“When Etihad arrived in 2014, we thought this time it would finally work, that this was it,” said Alitalia pilot Stefano Di Cesare of the Fit-Cisl union. Yet, Italian industry leaders say Etihad underestimated the country’s tangled politics and chronic labor strife.
Italian executives, officials and unions said in interviews with Reuters that alienating Alitalia’s workforce was among a series of missteps that ended Etihad’s Italian dream. Many also say Etihad underestimated the blistering growth of low-cost carriers Ryanair and easyJet. Without a majority stake, Etihad’s influence was limited despite being the largest single investor on 49 percent. And despite the lure of Italy’s important tourism market, it was forced to watch Alitalia’s efficient rivals mop up the benefits.
“There is no doubt that the idea to manage the company from Abu Dhabi was a very serious mistake,” Italian Industry Minister Carlo Calenda told Parliament last week.
The Etihad spokesman said Alitalia had been in financial trouble for decades and that its investment was welcomed wholeheartedly in Italy. Etihad believed the new restructuring plan developed by Alitalia’s management would have addressed its problems, he added.
In Germany too, Etihad had seen Air Berlin, its first investment in 2011, as the door to unrestricted access in a market where it has limited traffic rights with its own planes. But that airline has seen losses widen to a record €782 million in 2016. For now, Etihad continues to provide funding. Air Berlin says Etihad has granted another loan facility of €350 million and a letter of support for at least 18 months. But industry sources say Etihad could exit Air Berlin by seeking a deal with German flag carrier Lufthansa, with which Etihad is keen to work.
Lufthansa CEO Carsten Spohr said on Friday he had held talks with Abu Dhabi about the future of Air Berlin, but that it was up to the emirate to resolve Air Berlin’s €1.2 billion debt problem, which also prevents Lufthansa buying it.
Other investments such as Air Serbia and Air Seychelles have been more successful. There, Etihad was given hands-on management control and benefited from close diplomatic ties.
Even as the carrier picks up the pieces of its European adventure, Etihad faces its own restructuring that sources close to the company say has seen near-daily redundancies.
This may also weigh on the strategic decision facing Gammell, as he takes up his interim post this week, followed in coming months by a permanent successor to Hogan.
New Etihad boss to rethink strategy after Alitalia dream fails
New Etihad boss to rethink strategy after Alitalia dream fails

Oil Updates — prices gain on summer demand expectations despite wider economy woes

SINGAPORE: Oil prices rose on Wednesday, boosted by expectations of firm summer demand in the world’s two largest consumers, the United States and China, though gains were capped by analysts’ caution about the wider economy.
Prices have seesawed in a tight range as signs of steady demand from an increase in travel during the Northern Hemisphere summer have competed with concerns that US tariffs on trading partners will slow economic growth and fuel consumption.
Brent crude futures rose 36 cents, or 0.5 percent, to $69.07 a barrel by 8:46 a.m. Saudi time. US West Texas Intermediate crude futures were up 47 cents, or 0.9 percent, to $66.99.
That reversed two days of declines as the market downplayed the potential for supply disruptions after US President Donald Trump threatened tariffs on purchases of Russian oil.
Major oil producers are pointing to signs of better economic growth in the second half of the year while data from China showed consistent growth.
“Strong seasonal demand is currently providing upward momentum to oil prices, as summer travel and industrial activity peak,” LSEG analysts said in a note.
“Increased gasoline consumption, especially in the US during the Fourth of July holiday period, has signalled robust fuel demand, helping offset bearish pressures from rising inventories and tariff concerns.”
China data showed growth slowed in the second quarter, but less than feared, in part because of frontloading to beat US tariffs. That eased some concerns about the economy of the world’s largest importer of crude.
The data also showed that China’s crude oil throughput in June jumped 8.5 percent from a year earlier, indicating stronger fuel demand.
However, some analysts saw the price rebound as temporary.
Much of the steadying of crude markets after two volatile sessions resulted from a mild technical correction rather than any significant shift in underlying fundamentals, said Phillip Nova’s senior market analyst Priyanka Sachdeva.
“Investors should monitor inflation and interest rate expectations in the United States as Trump’s continued push for broader tariffs could be inflationary and could dampen fuel demand in the medium term,” she said.
OPEC’s narrative remained more optimistic, Sachdeva said, pointing to the grouping’s monthly report on Tuesday that forecast that the global economy would do better in the year’s second half, boosting the oil demand outlook.
Brazil, China and India are exceeding expectations while the US and EU are recovering from last year, it added.
“The technicals may offer short-term relief, but fundamentally, the market lacks momentum,” Sachdeva said.
“Until clarity emerges on global growth, policy direction, and real demand recovery, especially from Asia, the crude complex looks set to drift sideways.”
Bahrain, US firms sign $17bn in deals to deepen economic ties, news agency BNA says

LONDON: Bahraini and US companies signed a series of agreements worth approximately $17 billion, aimed at strengthening economic ties and advancing cooperation across key sectors, Bahrain’s state news agency BNA reported on Wednesday.
The deals span sectors such as aviation, technology, industry, and investment.
Among the agreements, Cisco Systems will provide digital solutions for Bahrain’s government information and telecommunications infrastructure. Separately, plans were announced to establish an 800-km, or 497-mile, multi-fiber submarine cable linking Bahrain, Saudi Arabia, Kuwait, and Iraq to global networks, according to BNA.
Bahraini financial institutions and private-sector firms also announced plans to invest $10.7 billion in the US, while sovereign wealth fund Mumtalakat signed deals with several US companies to invest $2 billion in downstream aluminum projects, with a focus on job creation.
The signing ceremony took place during Bahraini Prime Minister and Crown Prince Salman bin Hamad Al Khalifa’s visit to Washington late on Tuesday.
He emphasized that expanding cooperation with the US could help create new economic opportunities through investment and collaboration.
In 2023, Bahrain and the US signed a security and economic agreement, and Bahrain continues to host the US Navy’s Fifth Fleet and the headquarters of the US Naval Forces Central Command.
Saudi Arabia raises $1.34bn through July sukuk issuance

RIYADH: Saudi Arabia’s National Debt Management Center raised SR5.02 billion ($1.34 billion) through its riyal-denominated sukuk issuance for July, marking a sharp 113.6 percent increase compared to the previous month.
In June, the Kingdom issued sukuk worth SR2.35 billion, while May and April saw issuances of SR4.08 billion and SR3.71 billion, respectively.
Sukuk are Shariah-compliant financial instruments that offer investors partial ownership in an issuer’s underlying assets, making them a popular alternative to conventional bonds.
According to NDMC, the July issuance was divided into four tranches. The first tranche, valued at SR776 million, will mature in 2029. The second, worth SR1.34 billion, is set to mature in 2032, followed by a third tranche of SR823 million due in 2036. The largest tranche, totaling SR2.08 billion, will mature in 2039.
Saudi Arabia’s debt market has witnessed robust growth in recent years, attracting strong investor interest in fixed-income instruments amid a global environment of rising interest rates.
In April, Kuwait Financial Center, also known as Markaz, reported that Saudi Arabia led the Gulf Cooperation Council in primary debt issuances during the first quarter of the year. The Kingdom raised $31.01 billion from 41 offerings, accounting for over 60 percent of total issuances across the region.
Credit rating agency S&P Global noted in April that Saudi Arabia’s expanding non-oil sector and steady sukuk issuance volumes are likely to support the growth of the global Islamic finance industry.
The agency forecasts global sukuk issuance to reach between $190 billion and $200 billion in 2025, with foreign currency-denominated offerings contributing up to $80 billion, assuming market conditions remain stable.
Echoing that outlook, a report by Kamco Invest published in December said Saudi Arabia is expected to account for the largest share of bond maturities in the GCC between 2025 and 2029, with $168 billion set to mature during the period.
Earlier this month, S&P Global reiterated its positive view, stating that the global sukuk market is on track to maintain its momentum in 2025, with foreign currency-denominated issuances projected to reach between $70 billion and $80 billion.
Saudi Arabia tops MENA VC rankings with $860m in H1: MAGNiTT

RIYADH: Saudi Arabia led venture capital activity in the Middle East and North Africa in early 2025, raising $860 million — a 116 percent annual jump — backed by sovereign support and foreign interest.
In its latest report, regional venture platform MAGNiTT revealed that the Kingdom witnessed 114 deals in the first half of the year, marking a significant 31 percent rise compared to the same period in 2024.
This comes on the back of a strong 2024 performance, when Saudi Arabia retained its position as the most funded MENA country for VC for the second consecutive year. Startups raised $750 million, with a 34 percent increase in deal funding rounds below $100 million – dubbed MEGA deals – reflecting growing early- and mid-stage capital formation, according to a report released earlier this year by MAGNiTT and SVC.
In its latest report for the first half, MAGNiTT stated: “This growth was supported by continued sovereign capital activity, event-driven momentum from LEAP, and early-stage programs backed by new funds and accelerators.”
Saudi Arabia ranked second among emerging venture markets in total VC funding, trailing only Singapore, which raised $1.28 billion across 120 deals in the first half.
However, Singapore’s funding declined 37 percent year on year, while the number of deals dropped 31 percent.
“The drop (in Singapore) signals a continued cooldown in late-stage deployment and foreign investor activity amid macro headwinds,” the report stated.
Among emerging markets, Saudi Arabia was followed by the UAE, which raised $447 million in funding in the first six months of the year, a rise of 84 percent year on year.
The UAE also matched Saudi Arabia in deal count, recording 114 deals, up 10 percent compared to the same period last year. This was driven by increased international participation, which reached its highest level in the Emirates since the first half of 2020.
Elsewhere, Turkiye raised $226 million, followed by Vietnam at $216 million, Egypt at $185 million, and South Africa at $183 million. Nigeria raised $158 million, while Indonesia and Kenya secured $102 million and $71 million, respectively.
The report further noted that fintech was the leading sector across all three EVM regions in the first half, accounting for 45 percent of VC funding in Southeast Asia, 38 percent in the Middle East, and 45 percent in Africa.
“The bulk of this activity was concentrated in payment solutions and lending platforms, which emerged as the dominant fintech subsectors,” added the report.
Meanwhile, mergers and acquisitions activity across emerging venture markets saw 55 transactions in the first half, marking a 31 percent increase compared to the same period last year.
Closing Bell: Saudi main index closes in red at 11,095

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Tuesday, as it shed 118.18 points, or 1.05 percent, to close at 11,095.41.
The total trading turnover of the benchmark index was SR4.52 billion ($1.21 billion), with 46 of the listed stocks advancing and 204 declining.
The Kingdom’s parallel market Nomu also shed 55.43 points to 27,301.46.
The MSCI Tadawul Index declined by 1.09 percent to close at 1,421.31.
The best-performing stock on the main market was SHL Finance Co. The firm’s share price increased by 5.21 percent to SR22.62.
The share price of SICO Saudi REIT Fund rose by 5.1 percent to SR4.33.
Tourism Enterprise Co. also saw its stock price climb by 3.26 percent to SR0.95.
Conversely, the share price of Alistithmar AREIC Diversified REIT Fund declined by 4.03 percent to SR9.05.
On the announcements front, Saudi Co. for Hardware, also known as SACO, said that it signed an agreement valued at SR140.43 million to sell its warehouse in Al-Mashael district in Riyadh.
In a Tadawul statement, SACO said that the proceeds from the sale will be used to repay existing bank loans and help support its future expansion plans.
The firm further said that the 42,937-sq.-meter warehouse was sold to 6th Iradat Al Imdad Co., a limited liability company.
The firm added that there are no related parties involved in the deal.
The share price of SACO dropped by 1.02 percent to SR29.14.
The shareholders of Saudi Lime Industries Co. approved a recommendation to increase its capital by 5 percent through a one-for-20 bonus share distribution, by capitalizing SR11 million from the firm’s retained earnings account.
The stock price of Saudi Lime Industries Co., listed on the parallel market, advanced by 4.77 percent to SR12.97.