Research Study Based on Etihad Airway’s Product Offerings, Key Success Factors, Critical Issues, Mission and Strategy

1. Etihad Airway’s Product
A research study on:
Offerings, Key Success Factors, Critical
Issues, Mission and Strategy
By Arshed Aydrose
University of Wollongong

2. Etihad’s Product Offerings to the Far East nations.
Etihad Airways has been the winner of Air Transport World’s Passenger Service
Award for 2012 and it have been recognized the carrier’s excellent customer service
product and offerings of a premium service across all cabins. Etihad Airways is also
noted as it maintains a genuine service philosophy combining with best hospitality
with comfort with the help of employees from more than 120 different nationalities. It
is also remarkable that Etihad not only maintained but also improved its service level
to customers notably to its Far East customers. One of the major first in industry
move by Etihad is that they have launched its first premium connect services for its
customers from Bangkok and Hong Kong to provide bespoke and personalized travel
options using the fleet of modern luxurious executive jets. The national carrier of
UAE have also upgraded it on-board product with new private suites in First Class
and Business Class named next generation seating which is also made available to the
selected Airbus A330_300 flights to Beijing and Bangkok is that Et. Economy class
included the Panasonic eX2 IFE system which had new trim and finish and audio
visuals on demand which enabled in-seat capability for live news, USB file sharing,
SMS, Email and access to Microsoft office. Another turn over in the industry Etihad
Airways had started operating scheduled flights between its hub in Abu Dhabi and
Shanghai, China. It will operate non-stop commercial passenger flight between its
hub in Abu Dhabi and Shanghai with its world leading first class suites with onboard
chefs and E-Box onboard entertainment system. Etihad ensured that its travelers will
have unlimited access to the First and Business Class lounge in all of the airports in
major cities of China, Thailand, Malaysia and Indonesia. As Bangkok was Etihad’s
first ever long haul destinations in Far Eastern countries and the route’s seventh year

3. anniversary Etihad introduced regional Thai-language website which facilitate its
Thai costumers for easy access to it products and services. Etihad believes significant
growth in aviation industry in Far East countries mainly China, Thailand and
Singapore and set their product line early to the customers in order to take an early
advantage in the market as well as the good will. By the end of 2010, the airline’s
product and service team made a significant change and improvement in efficiencies
in order to support their best in class customer service by reducing cost. For the past
couple of years Etihad Airways have made inflight and aircraft developments in order
to penetrate the far eastern market and serve it customers better. Etihad’s premium
inflight service philosophy have expanded to all the Economy class on all flights and
routes to many major far east destinations like Bangkok, Seoul, Beijing and other
Asian routes. On longer flights to these destinations included hot beverages, multiple
course main meal with hot deserts. On March 2010, Etihad introduced a Japanese
inflight service method and which included Kaiseki menu a Japanese traditional
dining concept. A Kaiseki menu had bespoke utensils and beverages such as sake,
Japanese tea and Asahi beer. Their new adaptive service like Express Dinner could
which supported many Etihad guest by choosing preflight dining and reduced take of
weight and thus less fuel burnt. Their new meal automated planning system and
inflight duty free offerings resulted in gaining high material revenue.
Etihad’s Key Success Factors.
Identification of key success factors for strategic groups in the market is an important
output of market analysis. It in important to identify the key success factors and it is
also important to project them into the future and making uncertain key success
factors certain. Etihad airways have been successful in finding its key success factor
in the market as compared to its competitors. Etihad’s Key Success Factors are
classified into many major sub units like People, Products and services, Route System,
Partnership and Alliance and Revenue and Cost control.
Its People: People and performance division should always support and be supported
by various business divisions in order to improve the productivity and process for a
successful high performance organization. Etihad unique way of recruiting and
training process led to provide a better inflight customer service and gained them the

4. name of award winning cabin crew title. It also provide its cabin crewmembers and
pilots a chance to see the world by visiting their destinations and therefor a better
working satisfaction. Etihad provided its guest a 1st in industry inflight chef for the 1st
class and business travelers and enabled its economy class travels a chance to
consume the inflight chef service with a low charges. Etihad also opened its aviation
academy in Abu Dhabi for developing the skills of is staffs and a special training for
the communicative skills and crisis management. For a better serving its customers
the management introduced ‘iachieve’ model paying its staffs on performance base.
The introduction of ‘iachieve’ method of paying it enhanced the performance of its
working members by serving guest better and receiving appreciation accordingly.
Product and services: As Etihad dealing in a service industry identifying its key
success factors in the field of product and services are very important for attaining a
better competitive advantage. Etihad’s KSF in product and service have been
identified as inflight developments, aircraft developments and ground product
offerings. For the past couple of years Etihad Airways have made inflight and aircraft
developments in order to penetrate the far eastern market and serve it customers better.
Etihad’s premium inflight service philosophy have expanded to all the Economy class
on all flights and routes to many major far east destinations like Bangkok, Seoul,
Beijing and other Asian routes. On longer flights to these destinations included hot
beverages, multiple course main meal with hot deserts. On March 2010, Etihad
introduced a Japanese inflight service method and which included Kaiseki menu a
Japanese traditional dining concept. A Kaiseki menu had bespoke utensils and
beverages such as sake, Japanese tea and Asahi beer. Economy class included the
Panasonic eX2 IFE system made new trim and finish and audio visuals on demand
which enabled in-seat capability for live news, USB file sharing, SMS, Email and
access to Microsoft office. As ground product offerings Economy class passengers
have the access to free Wi-Fi at home airport, printing facility, luggage storage
function, family lounges and prayer rooms at Etihad’s home based terminal in Abu
Dhabi.
Route Systems: Etihad’s new and increased frequencies in the route flight schedule
system made them to achieve a better advantage in the competitive markets of Far
East region. Etihad’s daily flights to the several destinations like Beijing, Seoul and
Bangkok made their route systems unique and famous in Far East markets. By the end

5. of 2010 Etihad had five per week to daily flights from Abu Dhabi to Beijing China,
six per week to daily flights from Abu Dhabi to Seoul South Korea and ten flights per
week to double daily from Abu Dhabi to Bangkok Thailand.
Partnership and Alliances: At 31st December 2010, Etihad had almost most of the
codeshare agreements with many international carriers which also served Far East
region. It had a total of 28 codeshare agreements in place with leading airlines and
gave them a advantage in serving several international destinations. By Etihad’s
remarkable alliance with Australia’s Virgin Blue Group of Airlines in September
2010, made its Far East customers having easy travel to Australia with no stop
over. By receiving the approval from Australia’s competition regulator made
both of the airliners easy to cooperate on scheduling, pricing and other various
co-operations. By developing a strategic alliance with virgin airlines alone made
Etihad to create 1million USD daily as revenue and 1 billion USD in other
codeshare and alliances with other major airlines all over the world.
Etihad’s Revenue and Cost Control:Etihad made a significant improvement in
Revenue and Cost Control with a robust support from finance division by
providing support to the business with financial, risk management, financing and
other services. Another unique key success in the field of cost control was that
Etihad’s Express Dinning Service for long over night flight passengers could have
their meal at the airport lounge before the departure so it can reduce the amount
of meal carried in the aircraft and thus reduces weight and made less fuel burned.
On April 2010, by the introduction of New Meal Planning System Etihad could
reduce the cost of excess order of meals and could eliminate the chaos due to
shortage of meals delivers to its passengers onboard. At the time of high fuel
expense and in order to take the advantage over the competitors by reducing
fuel cost Etihad asked their pilots to adapt a high altitude flying strategy for
reducing the atmospheric pressure and therefor less fuel burnt during the flight.
Critical Issues faced by Etihad Airways
Etihad is always flying high with its plans to double its destinations around the
globe and serve 25million passengers by 2020. Like every international carrier

6. Etihad faces many issues and challenges now and ahead. One of the main issues
facing by Etihad like many other independent carriers is that the increase in fuel
expense. With the leadership of CEO James Hogan, Etihad have successfully
hedged aggressively and are keeping a strong focus on reducing its cost and
bringing it under control without compromising its products offered to
customers or customer service. Even though Etihad is a product of a oil rich
country United Arab Emirates, Etihad’s competitors are running for the cost
control and reduce its fuel expenses with the means of many advanced strategies
around the world. So it is important for Etihad to follow the same rule of cost
control in order to avoid gaining a advantage by its competitors.
The next important issue faced by Etihad is that gaining the operational rights
and issue of receiving slots from the foreign countries in order to operate in the
region. After the down turn of the global economy most of the foreign
governments bring many regulations for the foreign airliners for the purpose of
protecting their home carriers. For example, in the last year Australia and
Germany reportedly blocking more flights from Emirates and Etihad and
revoking the permission to serve in their new airports like Germany’s in
Brandenburg international airport. Etihad’s one of the major issue faced in the
expansion of Far East regions is that getting landing slots at the Singapore
airport. Even though Singapore is a key market for expansion the issue of getting
new slots at the airport due to air traffic conditions create a greater threat and
challenge for Etihad. These challenges faced in Europe will effect Etihad’s
ambition to serve Europe to Far East market.
The next threat is that is about how Asian and European rivals make use if the
new generation aircrafts and new technologies. As New generation aircrafts are
capable of flying up to 19hours and 17500 km and threat of loosing Etihad’s hub
in Middle East for the passengers between Europe and Asia. Due to the much
more sophisticated aircrafts advantage of Etihad’s stop over at Abu Dhabi may
loose later in the future by bypassing Middle East Hubs.
In short the main regions that creates problems for Etihad are fuel expenses,
home infrastructure, foreign regulatory policies and staff for the airline. If Etihad

7. wants to expand its presence in many other destinations in the world, a fine
equipped home airport with latest facilities and with desired manpower are
inevitable and important. The growing fuel prices globally are creating a
negative after effects for the total aviation industry as well as Etihad Airways too.
Even though Etihad is attracting many candidates to the pilot programs from
different part of the world, the lifestyle and living in Gulf in a setback for the
success.
Mission (Etihad Tomorrow)
Social responsibility and sustainability are the core factor of Etihad’s business
process. Etihad airways are fully committed to work its business to make sure
for a responsible management that had a positive impact on the environment.
The adoption of the new environment policy and the partnership with the
Masdar Future and focusing on its fuel-efficient flight Etihad is focused on
following the policy of reduce, reuse and recycle. A part from the environment,
Etihad is trying to create a mission and objectives in the competitive global
market mainly Far-East regions. With the commitment of growing in the Far East
region Etihad is planning to open many other destinations in Japan, South Korea,
China and Thailand. Etihad’s interest in this region have made to set a goal of
creating 15 more destinations and setting two Etihad lounges in the region by
the end of 2019. Etihad believes that by creating many other codeshare and
alliances with other airlines and by opening many other offices in this region will
help serving their passengers directly and better. By the end of 2012, Etihad is
planning to operate nonstop economy flights from Abu Dhabi to Bangkok and
Abu Dhabi to Shanghai daily. By 2030, Etihad mission is it expand its product
offerings and enhance customer experience by replacing its entire inflight
premium class individual screens to 3D technology and all of its economic class
individual screens to high definition graphics. One of the missions of Etihad in
the field of its people is to create diversity among its staffs across the world by
employing staffs from different countries and of different sex. As the national
carrier of United Arab Emirates Etihad mission is to make Arabian hospitality
closer and available to other part of the world by creating a sense of cultured,
considerate, warm and generous staff attitude and services. As now remarked as

8. innovative carrier Etihad wanted to maintain its name as most innovative
airlines in the world as compared.
Strategy
Etihad’s cooperate strategy is to be the best airline in the world, to become profitable
and to contribute at its best to Abu Dhabi 2030 plan. Most of Etihad’s cooperate
strategy is created and planned by the mandate from its shareholders. On the year of
2010 Etihad’s top management team were focused on a strategy to grow and achieve
its scale quickly and to develop sustainable business process and its systems and to
lead from a start up position to maturity level. In order to measure and analyze the
progress and assess the strategic direction of the airline Etihad hired a leading
management consulting firm called Booz and Company in 2010. The company found
that Etihad have successfully and efficiently delivered its shareholders vision, but
there are several structural limitations, which complicated the airline’s ability to reach
profitability. To overcome the limitations Booz and Company suggested a better
business model in order to diversify its current structure to engage in many
partnerships, distribution, hub operations and its air cargo. By approval of this
business model by Etihad’s senior management and board on 2010, Etihad have
doubled its global activity and profit level as compared to its other competitors since
past 2 years from now.
REFFERNCES
1) The Times 2012, Etihad Airways wins award for ‘inspired service’ [online],
Available from:
http://www.timesofmalta.com/articles/view/20120119/business-news/Etihad-
Airways wins-award-for-inspired-service-.402965 [Accessed: 29.3.2012].
2) travelwerke 2011, ETIHAD AIRWAYS LAUNCHES PREMIUM CONNECT,
PARTNERS ROYAL JET [online], Available from:
http://travelwerke.wordpress.com/2011/05/06/etihad-airways-launches-
premium-connect-partners-royal-jet/ [Accessed: 29.3.2012].

9. 3) ASC Staff 2012, Etihad Airways commences passenger service to Shanghai
[online], Available from: http://www.arabiansupplychain.com/article-7200-
etihad-airways-commences-passenger-service-to-shanghai/ [Accessed:
29.3.2012].
4) Etihad Airways 2011, Etihad Airways celebrates success of South Asian
routes with CEO visits [online], Available from:
http://www.etihadairways.com/sites/Etihad/ae/en/aboutetihad/mediacenter/ne
wslisting/newsdetails/Pages/etihad-celebrates-success-of-south-asian-routes-
Apr11.aspx?fromNewsListing=false [Accessed: 31.3.2012].
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01.3.2012].
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Factsheet.pdf [Accessed: 01.3.2012].

10. 12) Etihad Airways 2010, CRS Report [online], Available from:
http://www.etihadairways.com/sites/Etihad/Etihad%20Images/Resources/csr-
report-2011.pdf [Accessed: 01.3.2012].
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[Accessed: 01.3.2012].
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01.3.2012].
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