Etihad Airways Profile

Overview - Etihad Airways

Etihad – promising big growth for its emirate

Located just over an hour by road from the Dubai Airport, Etihad Airways was founded in 2003 in coordination with the Government’s withdrawal from Gulf Air. The carrier has had out-sized ambitions since its inception and has worked since launch to achieve the scale to become a regional leader.

For the time being, Etihad’s ambitions are at least as much linked with promoting petroleum-rich Abu Dhabi as a destination for business and tourism activities as with running a profitable air transport concern.

In Feb-06, Abu Dhabi Crown Prince Shaikh Mohammed bin Zayed Al Nahyan, stated “the objective behind the airline establishment is to promote the tremendous tourism potential of Abu Dhabi [and provide the] best transportation facilities to the residents”.

Although the carrier has established non-commercial objectives as its chief raison d’etre, management, which was in Sep-06 joined by new CEO, James Hogan, has worked to insert a more commercial focus to the carrier’s operation.

One example is the setting of a timeframe for the carrier to start earning profits. Hogan stated that, “what's important to the shareholders is that by 2010, Etihad can stand on its own two feet. The next three years is really about getting the glue, getting the right inventory systems in place, the right yield management and the right processes that manage the quality of revenue”.

Another example is the up-scaling of the cargo arm, Etihad Crystal Cargo. The freight division used bellyhold capacity and three A300-600Fs to carry 134,000 tonnes and generate 2006 revenue of USD216 million, doubling 2005 figures. The unit forecasts that it will carry more than 200,000 tonnes in 2007.

On the passenger side, in addition to the high-profile services – and planned services – to New York, Toronto (via Brussels), London (Heathrow and Gatwick), Paris, Johannesburg, Sydney, Milan and Brisbane, the carrier is a major player in the labour market. It took over former Abu Dhabi flag carrier Gulf Air’s rights to Jakarta and has services to Dhaka, Colombo, New Delhi and Mumbai (4 million Indians reside in the Middle East), as well as four destinations in Pakistan (5 million Pakistanis work in the Gulf region) – Karachi, Islamabad, Peshawar and Lahore.

And more growth is to come – a Mar-06 expanded bilateral air services agreement with India opened the door to the launch of services to Thiruvananthapuram and Kochi.

These services are part of an aggressive, fast-paced build-up, which has seen the carrier maintain service to 30 destinations within its first 30 months of operation, well on target for its aim of having a destination portfolio of 70 airports by 2010. Having carried 3 million passengers in 2006 (up 150% on 2005’s 1.2 million), the carrier intends to fly more than 4 million in 2007, a goal it will achieve in part by adding 18% more capacity summer-07 with 40 new weekly flights.

A major focus for the carrier will be on increasing key sectors to double daily service, such as New York, New Delhi, Mumbai and Sydney. Etihad will take delivery of a further ten aircraft in 2007, taking its fleet to 31, covering 45 cities (up from 38 at present) by the end of the year. By 2010, Etihad plans a 50-aircraft fleet serving 70 cities from Abu Dhabi.

This capacity augmentation will be achieved on the back of extensive additions of aircraft to its currently 21-strong, all-widebody fleet, with three A330-200s and two A340-600s to join the stable before Sep-07. The additions are part of an outstanding order book of 20 units, including four A380s. In Jun-07, it added momentum to its plans with an order at the Paris Air Show for five A330-200s, four A340-600s and three A330-200Fs, even as it deferred deliveries of its four A380s from 2009 to 2013.

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