Etihad Airlines’ Business Opportunities During COVID-19

Executive Summary

Etihad Airways is arguably one of the best-performing airline organizations in the world. The company was incorporated in November 2003 and had its headquarters in Abu Dhabi (UAE). Etihad Airways currently faces stiff competition from other global layers in the airline travel industry. Emirates Airways, for example, beats Etihad Airways on several aspects, thus denying the firm, Etihad Airlines, the ability to realize its dream of becoming the best and leading airline company around the globe. As such, struggles with travel prices and limited business models, among other aspects, are to blame for the several challenges that Etihad Airlines is facing.

Companies like Emirates Airlines charge lower fees relative to Etihad Airlines, while the offered services are almost the same. The present-day COVID-19 pandemic is also causing more problems to Etihad Airlines, like the other operators in the airline industry. Nonetheless, Etihad Airlines exhibits some rare opportunities that the firm can combine with precise strategies to realize increased competitive power and to realize its mission and vision.

Industry Background

Etihad Airways is a global player in the air transport sector. The entity is now about eighteen years old and operates a total of over one hundred fleets. Etihad Airways is a national carrier and is highly supported by the UAE government. The government views the airline organization as a critical aspect in bridging the east and west, mainly for business purposes. Kingsley-Jones (2018) notes that the airline industry is significantly competitive. Travel prices, quality of service, comfort, reliability, and several other elements constitute the primary issues that customers use to choose a preferable airline firm for use.

Etihad Airways succeeds significantly in identifying and utilizing opportunities to control the market. The organization was, as of 2010, rated the fastest-growing airline entity. Kingsley-Jones (2018) further reports that Etihad Airway’s ability to register growing revenues over the 2008-2009 global economic crisis surprised many people, including investors. A rare opportunity that the organization enjoys is the support of the UAE government, which intends to make the carrier a global force.

Nature of the Opportunity

Etihad Airways can boost its competitive power in the highly competitive airline transport industry by adopting an enriched business model other than focusing on a few aspects of the business. Kingsley-Jones (2018) says that the airline travel sector is significantly complex, and investors in the same can make a lot of money by diversifying their operations. Etihad Airways, however, fails substantially on the diversification issue. The entity’s primary focus during its first ten years was to realize scale rapidly (O’Connell et al., 2018).

The organization managed to achieve the goal but now appears fixated. O’Connell et al. (2019) argue that Etihad Airways does significantly nothing to generate income from other activities but for flight operations to other nations. The organization, for instance, allows travel agents to influence customers’ interests while it already has money to launch its own travel advisory platform that will offer services even to the competitors’ clients.

Etihad Airways to enter the accommodation business, now that the company is used by the UAE government as the nation’s symbol in the general travel and hospitality sector. The scholars say that accommodation services continue to become unaffordable to many travelers around the globe. That is because persons or organizations providing such essential services often charge unreasonably high rates that discourage many travelers. The only alternative to travelers unable to pay the hiked accommodation fees is to seek shelter in the Airbnb-operated makeshift rooms that often pose insecurity threats (Kingsley-Jones, 2018).

Therefore, Kingsley-Jones insists on the need for traveling giants like Etihad Airways to have their own accommodation venues that will be operated using the same cost leadership model that the entity utilizes on freight charges. Etihad Airways can start with having hotels in UAE before expanding to different other parts of the world where they serve. Starting such a line of services while charging competitive fees will see the organization diversify its products to make more earnings.

Establishing a company-owned trip-booking application that runs on smartphones and other smart devices also forms a crucial diversification aspect that Etihad Airways can adopt to expand its competitive power. Rotondo et al. (2019) maintain that intermediaries between airline travelers and transport services providers have a key role in influencing which services provider customers go to. As such, the source says that many travel advisory platforms and organizations work in collaboration with airway organizations to get customers.

Consequently, Rotondo et al. (2019) advise airline transportation organizations with the potential to have company-owned voyage booking websites to endeavor to establish such. The advice, therefore, targets the likes of Etihad Airways, which is one of the wealthiest airline corporations around the globe. Starting and managing a successful booking website that operates even on smartphones, coupled with the idea of owning affordable accommodation facilities, will assure Etihad Airways’ continuous and increased flow of income. The organization also needs to consider partnering with credit card entities to promise and offer customers more special reward packages, like ‘free miles,’ that will increase patrons’ loyalty.

Resources Available

Etihad Airways is one of the wealthiest airlines in the world. The organization operates several other elite business lines that offer high returns. One of the most outstanding strengths exhibited by Etihad Airways, therefore, concerns the financial capacity to cushion some capital-intensive projects that very few competitors can (Kingsley-Jones, 2018). Furthermore, Etihad Airways receives excessive support from the UAE government, which gives the firm a noteworthy upper hand. As a result, implementing the earlier suggested diversification strategies that will allow the company to earn even when its aircrafts are not moving much because of COVID-19 is highly possible. Kingsley-Jones (2018) reports that having money gives Etihad Airways the chance to acquire the right kind of workforce to take the company through the necessary steps in realizing the proposed developments.

Sponsoring a famous and successful football club that plays in several elite leagues is also a rare strength that markets the airways significantly. Consequently, a look at the potential exhibited by Etihad Airways shows the organization to have every ability to realize new scales and to become the global market leader that the investors and the UAE government envision it to be. To realize such success, however, Etihad Airways needs to proceed at a moderate pace and focus mainly on getting a workforce with the necessary skills and talents to support the diversified operations.

Conclusion

Etihad Airways is a UAE-based organization that provides air transport solutions around the globe. The company is now eighteen years old and has about one hundred and four aircrafts that reach about two hundred destinations in a week. Etihad Airways serves as a national carrier to the UAE, and the government thus supports it significantly. The UAE administration views Etihad Airways as a bridge between east and west and, therefore, offers much support to the entity. Stiff competition and lack of diversity are some of the most critical issues eating Etihad Airways.

Moreover, Etihad Airways’ aspect of concentrating mainly on offering air transport services while disregarding several other opportunities in the sector costs the company significantly. As a diversification strategy, Etihad Airways needs to try ventures like starting and owning voyage booking sites and offering affordable accommodation services to the global citizens.

References

Kingsley-Jones, M. (2018). Etihad airways. Airline Business, 28(8).

O’Connell, J. F., & Bueno, O. E. (2018). A study into the hub performance Emirates, Etihad Airways and Qatar Airways and their competitive position against the major European hubbing airlines. Journal of Air Transport Management, 69(1), 257-268. Web.

Rotondo, F., Corsi, K., & Giovanelli, L. (2019). The social side of sustainable business models: An explorative analysis of the low-cost airline industry. Journal of Cleaner Production, 225 (1), 806-819. Web.