Etihad Airways: The Success Story

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Introduction

Etihad Airways is the national United Arab Emirates (UAE) airline, which has been noted for its rapid development and the capturing of a significant part of international air carrier operations. It is the second-largest airline in the UAE after Emirates and was established in 2003, with the fleet hub in Abu Dhabi International Airport and headquarters in Khalifa City, Abu Dhabi (Hardiman, 2021). While the airline is relatively young, it has managed to establish a large number of codeshare agreements with other airlines, including Turkish Airlines, KLM, American Airlines, Aegean Airlines, and China Eastern Airlines (Kunesh, 2020). Therefore, the operations and the business model of the organization are essential to discuss as Etihad has demonstrated an excellent understanding of its target market and shaped its aviation activities to fit the demands of customers.

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History of the Company

Etihad Airways has had little time to come a long way as an airline. In 2003, it was established by the Emiri Decree by Sheikh Khalifa bin Zayed Al Nahyan and is in full ownership by the Government of Abu Dhabi, mandated to operate safely, commercially, and profitably (Hardiman, 2021). The relation of Khalifa bin Zayed to the Sheikh Ahmen bin Saif Al Nahyan allowed establishing an initial paid-up capital (Forbes, 2018). The company’s services were launched with the ceremonial flight to Al Ain on November 5, 2003, while on November 12 of the same year, Etihad began its commercial operations with the launch of services to Beirut (Kamel, 2021). From that point, Etihad has been investing in its fleet in accordance with its strategic plans to broaden its horizons and bring attention to Abu Dhabi as a potential strategic partner.

Etihad’s Business Model

With the adverse impact of the COVID-19 pandemic on airlines operations, companies operating in the sphere of air travel have been challenged to adapt to a new environment and adjust their strategies accordingly. The vision of Etihad Airways is to represent the best airline in the world, connecting the destinations around the globe. It aims to reflect the values of Arabian hospitality while also increasing the interest of the global community in Abu Dhabi as a world-class destination for leisure and business (Etihad, 2019). To align its operations with the vision, mission, and values, Etihad has developed a business model with short- and long-term goals.

Etihad Airways has worked on keeping the flight costs relatively low to maintain a stable inflow of new customers. In addition, as a response to the pandemic, Etihad has revamped its operating model into a “mid-sized airline that is “leaner, flatter and scalable to support organic growth as air travel resumes” (Covey, 2020, para. 2). The organization’s leaders have acknowledged the fact that the airline industry changed significantly, positioning Etihad as a mid-sized carrier. The operational change will also result in a shift in a business model for long-term sustainability, ensuring the delivery of safety and security onboard.

The Current Fleet

The airways’ fleet has been developed to meet the perfect balance in performance and operational efficiency. Ranging from cargo planes to the latest and most advanced Boeing 787, the fleet that Etihad Airways currently possesses meets the highest standards of efficiency and technological advancement. The company operates the fleet of both narrow- and widebody Airbus and Boeing aircraft. Etihad reports having a total of ninety-three planes in its fleet (Etihad, 2021). The intention behind having a diverse and sophisticated fleet also aligns with the business morel of the company. Etihad wants its customers to experience comfort and hospitality of the highest levels. Moreover, having an updated fleet allows working on the green initiatives, reducing waste both on board in terms of plastic use and in the air in terms of cutting fuel emissions.

The Future of Etihad

The future of Etihad Airways depends significantly on the nature of the airline industry and demand for air travel as related to the COVID-19 pandemic. The organization’s leadership has already initiated a transformation of Etihad into a mid-sized full-service carrier to reduce the devastating effects of the pandemic and maintain profitability. Besides, the introduction of the Etihad Wellness program that emphasizes travelers’ health has positioned the organization as a responsible and customer-oriented business that prioritizes the interests and safety of customers above its profitability (Begum, 2020). Such an approach toward business has established a positive reputation of the company, increasing the likelihood of new customers coming as travel restrictions alleviate.

UAE’s General Civil Aviation Authority’s Role

The UAE’s General Civil Aviation Authority (GCAA) represents the primary and only federal authority for controlling and regulating civil aviation operations in the UAE. It is responsible for providing en-route navigation services and other processes related to flight safety (GCAA, 2021). For example, in 2020, Etihad became the first airline to introduce electronic technical logs, and the implementation of the initiative had to receive approval from the GCAA (Etihad, 2020b). In partnership with the GCAA, Etihad completed months of trials before replacing paper documentation with electronic logs. Thus, all operations of Etihad Airways are subjected to the scrutiny and analysis of the GCAA, which enforces security and safety regulations according to the highest international standards and best practices.

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Non-GCAA Rules and Regulations

Besides the enforcement of rules and regulations imposed by the GCAA, Etihad Airways is also subjected to the authority of the International Civil Aviation Organization (ICAO). The organization is tasked with creating regulations for airlines’ safety and security, as well as efficiency, regularity, and environmental protection. Besides, it regulates any operating practices and processes covering the technical aspect of aviation. For example, in Etihad Airways’ commitment to zero net carbon emissions by 2050 received praise from ICAO as the latter supports the continuous effort of airways to lift the climatic burden of the airline industry (ICAO, 2020). Therefore, the organization supports the range of improvement initiatives from airlines while also imposing strict rules that they must follow in their operations. Due to globalization, it is imperative to hold airlines accountable to the same standards in operations, especially concerning safety and security.

Conclusion

The success story of Etihad Airways shows that making vision a reality entails consistency and dedication to high standards of practice. While being a government-owned organization, the airline has shown top-notch performance in global cargo and passenger operations. Etihad is constantly adapting to the current changes in the airline industry, with the focus placed on the comfort and safety of its customers and the strengthening of the UAE’s reputation in the global arena. While the future of civil aviation is currently defined by environmental factors, Etihad has shown innovativeness and dedication to its mission, which is a positive contributor to success.

References

Begum, H. (2020). Etihad launches new wellness program to focus on passenger health. Web.

Covey, C. (2020). Etihad revamps its operating model. Web.

Etihad. (2020a). Corporate profile. Web.

Etihad. (2020b). Etihad Airways becomes the first airline in the UAE to roll out electronic technical logs. Web.

Etihad. (2021). Our fleet. Web.

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Forbes. (2018). Khalifa bin Zayed Al-Nahyan. Web.

GCAA. (2021). About GCAA. Web.

Hardiman, J. (2021). From Abu Dhabi to the world: The history of Etihad Airways. Web.

ICAO. [@icao]. (2020, December 16). Terrific news: @Etihad has committed to zero net carbon emissions by 2050! It is encouraging to see the climate ambition and #climateaction continuing to lift throughout the global civil #aviation sector [Tweet]. Twitter. Web.

Kamel, D. (2021). Iata AGM: Etihad’s first A350 to join its sustainability test-bed programme, CEO says. The National News. Web.

Kunesh, A. (2020). The ultimate guide to Etihad partners. Web.

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BusinessEssay. (2022) 'Etihad Airways: The Success Story'. 12 November.

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BusinessEssay. 2022. "Etihad Airways: The Success Story." November 12, 2022. https://business-essay.com/etihad-airways-the-success-story/.

1. BusinessEssay. "Etihad Airways: The Success Story." November 12, 2022. https://business-essay.com/etihad-airways-the-success-story/.


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BusinessEssay. "Etihad Airways: The Success Story." November 12, 2022. https://business-essay.com/etihad-airways-the-success-story/.