Dubai Air Show

Etihad embarks on bold growth strategy

 - December 6, 2006, 12:24 PM

Two-year-old Abu Dhabi-based Etihad Airways has started life with such precocious growth rates that it makes neighborhood trailblazer Emirates Airline look almost conservative. In the Gulf region’s anything-you-can-do-I-can-do-better air transport market, Etihad, Emirates and Qatar Airways have continued to trump each other with ever more optimistic fleet expansion plans.

Etihad began operations in 2003 with no more than a pair of Airbus A330-200s that it flew initially to Beirut and Damascus. By 2010, it expects to operate more than 50 jetliners–making it the new best friend to Airbus’ and Boeing’s sales teams.

By early this year Etihad had added another 14 destinations in as many months, branding itself as the national airline of the United Arab Emirates (as distinct from Dubai-based Emirates, which presents itself as UAE’s international carrier). The fleet has expanded with similar speed and now includes six A330s, two Boeing 767-300ERs, an A340-300 and three Airbus freighters. The carrier also has begun to receive five Boeing 777-300ERs slated for delivery by year-end.

Delivery schedules call for another 12 A330-200s and four very long-range A340-500s to arrive next year, followed by four 340-600s and four A380-800s in 2007. Etihad also holds options on a dozen more Airbuses of as-yet-undefined type.

Etihad, like its neighboring Arab carrier Qatar Airways, outwardly seems to have adopted the business model of Emirates by establishing a government-owned operation to offer high-profile and high-quality scheduled services with the latest aircraft. But to match Emirates the airline must see accompanying investment in, for example, hotels and tourism to attract enough travelers.

CEO Robert Strodel, a former Lufthansa senior official assigned to lead Etihad four months ago y chairman Dr. Sheikh Ahmed bin Saif Al Nahyan, started with Etihad as head of cargo and mail operations after a stint as managing director of Lufthansa Cargo India. In another Emirates parallel, the airline chairman is also director general of the local Department of Civil Aviation.

Etihad’s new fleet will introduce a cabin product meant to convey the airline’s principles of “different and better.” A new A330-220 that inaugurated flights to Frankfurt on June 1 became the first to sport the new layout and has flown on different routes to demonstrate the coming standard.

Alternative Sobriquets

To help establish the idea, Etihad chose alternative sobriquets for otherwise well-understood concepts: travelers are not passengers (and certainly not customers) but rather “guests,” while different sections of the cabin re known as “zones” and carry unique branding adopted to differentiate between conventional classes of travel.

A dozen sleeper seats in the first-class Diamond Zone offer a 180-degree recline with a seat pitch of around 10 feet. So-called “ground concierges,” meet first-class “guests” at their departing airport and take their luggage before accompanying them throughout the boarding process. Once aboard, the concierge will stow the traveler’s hand luggage, ensure he or she gets comfortably seated, introduce him or her not to a cabin attendant, but to a “flight host,” who will look after just four or five such “guests.”

The new Pearl Zone (business class) features an almost-flat folding sleeper seat. There, passengers are assigned to dedicated members of the cabin crew, who will greet them as they enter the cabin and personally assist them to their seats.

In the Coral Zone (economy class), passengers enjoy 32 to 36 inches of “leg room,” rather than seat pitch. Eschewing stereotypes about “cattle class” service, Etihad has promised that economy-class “guests” can “look forward to a level of respect, courtesy and comfort that other airlines don’t even begin to approach.”

According to Etihad, the reconfigured A330 is the first Airbus widebody fitted with the i-4000 “on-demand” audio and video in-flight entertainment system the carrier will introduce on all new aircraft. The airline has equipped every seat with high-resolution LCD/DVD-quality screens claimed to match the very best home-video systems and designed to be “the clearest in the air.”

Etihad has also caught the mood of the moment with a cabin lighting system said to offer passengers a “constantly changing atmosphere to match the time and duration of their journey.” The airline quotes medical research said to show that such lighting can “considerably” reduce stress levels normally associated with long-haul air travel.

Award-Winning Chefs

The airline also attaches great importance to passengers’ eating experience, claiming that everyone gets served meals conceived by award-winning chefs. Diamond and Pearl passengers eat from Rosenthal and fine china plates, respectively, while Coral passengers get “specially designed” Wedgwood melamine.

Etihad sees Dubai’s economic boom pushing cargo volumes up by over 400 percent in the next five years as it adds more freighters, possibly including Boeing 777-200LRF equipment. The airline carried nearly 20,000 tons of cargo in 2004, and from a target of more than 70,000 tons this year, it plans on flying more than 500,000 tons annually before 2011.

Etihad began dedicated cargo flights last February with a commercial freight flight to Frankfurt some four months ahead of passenger services on the route. Dubbed Etihad Crystal Cargo, the freight services division began with two flights a week with the first of two newly converted Airbus A300-600F. In May Etihad extended cargo services to Milan and southern Europe. Next on the list comes the Jordanian capital Amman. Other new destinations include points in eastern Africa and India. By the end of next year, Etihad hopes to have introduced four new freighters, including an A310-300F.