The main aim of this paper is to provide an analysis on UAE’s Etihad Airways and suggest possible solutions to any potential or current problems; and discuss various options available to the airline. This is accomplished by providing a brief history of Etihad Airways, followed by a thorough industry and company analysis, and finally a number of suggestions are provided to improve performance of the company. The industry analysis is conducted through the Porter’s five forces framework to gauge the various sources of competitive advantage available to the company.
Background on Etihad Airways Etihad Airways commenced operations in July 2003 in Abu Dhabi, which is the capital city of the United Arab Emirates. It is the National Airline of the UAE. Initially, the company possessed capital of about half a billion Dirham, which is the official currency of the UAE. The main objectives behind the launching of Etihad Airways are that an airline should exist that carries the flag of the UAE and also to show a good and hospitable nature to guests on the flight.
The word “Etihad” means “United” and portrays the unity and brotherhood between all the Emirates of the United Arab Emirates (Etihad Airways, 2008). The first flight to commemorate the launch of the airline was in early November 2003 to Al Ain, a city in Abu Dhabi. Later in the same month, the first commercial flight took place when an Etihad airline touched Beirut in Lebanon (Etihad Airways, 2008). As Etihad proceeded forwards with time, it started to expand at very high proportions. Their different routes and destinations also increased, with around ten to twelve different routes being added every year.
According to the official website, they have estimated that by the end of the decade, they will reach about 70 destinations, which means that they plan to maintain their ratio of about one route per month (Etihad Airways, 2008). From inception to now, Etihad Airways has added several feathers in its cap. It has won three awards for Leading New Airline of the Year in 2004 and the next two years as well awarded by the World Travel Awards (Etihad Airways, 2008). Etihad Airways has received a four star ranking from SKYTRAX, a consultancy in the UK for airline research (SKYTRAX, 2009).
In 2008, Etihad Airways won three prestigious crowns from World Travel Awards for Middle East’s Leading Airline, Middle East’s Leading Airline Website and Middle East’s Leading First Class (World Travel Awards, 2008). Vision Etihad Airways has a very simple, yet meaningful vision. They want to become a true Middle Eastern Airline that symbolizes Arabian hospitality and culture and traditions. Also, they aim to be innovative and inline with technology to be a leading twenty first century airline. Moreover, they plan to stay “in touch with” customers’ needs and expectations and providing a relaxing environment (Etihad Airways, 2008).