ETIHAD AIRWAYS

Assignment I

Contents
INTRODUCTION...................................................................................................... 2
BACKGROUND........................................................................................................ 3
ETIHADS CORE VALUES......................................................................................... 4
COMMITMENT........................................................................................................ 4
VISION AND MISSION............................................................................................. 5
HISTORY................................................................................................................. 6
LOYALTY PROGRAM................................................................................................ 6
FINANCIAL PERFORMANCE..................................................................................... 9
FINANCIAL POSITION.............................................................................................. 9
FINANCING ACTIVITIES......................................................................................... 11
EXTERNAL ENVIRONMENT.................................................................................... 11
GENERAL ENVIRONMENT..................................................................................12
EXTERNAL ENVIRONMENT ANALYSIS.............................................................41
INDUSTRY ENVIRONMENT ANALYSIS.................................................................44
1.

Porter's 5 forces model...........................................................................44

COMPETITOR ANALYSIS..................................................................................... 65
INTERNAL ENVIRONMENT.................................................................................... 68
COMPETITIVE ADVANTAGE...................................................................................90
VALUE CHAIN ANALYSIS........................................................................................ 92
IMPORTANT ENVIRONMENTS THAT ETIHAD NEEDS TO BE AWARE OF:...............108
ARE THE VISIONS AND MISSIONS CLEAR AND MEASURABLE?............................110
REFERENCES...................................................................................................... 111

INTRODUCTION
Strategic management is the comprehensive collection of ongoing activities and processes
that organizations use to systematically coordinate and align resources and actions with
mission, vision and strategy throughout an organization. Strategic management activities
transform the static plan into a system that provides strategic performance feedback to
decision making and enables the plan to evolve and grow as requirements and other
circumstances change (Dess, Gregory G., G.T. Lumpkin and Marilyn L. Taylor, 2005).
Our group decided to work upon Etihad Airways, the flag carrier airline for United Arab
Emirates. The name Etihad is derived from an Arabic word which means union. In
addition to its main activity of passenger transportation, Etihad controls Etihad cargo and
holidays. Aside from that, they have stakes in many other airlines as well. Some examples
include Air Berlin, Air Seychelles, Jat airways (Serbian national airline) and Virgin Australia
to name a few. In this report we provide a detailed insight on the companys information,
performances and analyze the external and internal environment and see how they affect the
company. These environments in brief are:

External Environment
o General environment
o Industry environment
o Competitor environment
Internal Environment
o Resources
o Capabilities
o Core competencies
o Competitive advantage
o Value chain analysis
o Outsourcing

BACKGROUND
The slogan of Etihad Airways is From Abu Dhabi to the World. Etihad is a world-leading
airline based in the Persian Gulf. Etihad is currently known as one of the Big 3 airlines
based in the Middle East, the other 2 being Emirates and Qatar Airways. Etihad airways was
first appointed as the flagship carrier for the United Arab Emirates (UAE) back in 2003.
Since then, it has seen rapid success, becoming one of the fastest growing airlines in
commercial aviation history. Etihad Airways operates approximately 1300 flights per week
to 86 different destinations around the world, on every continent with the exception of
Antarctica. The airline itself deals mostly with passenger transportation, but also has 2 other
divisions which are: Etihad Cargo and Etihad Holidays, a cargo service and in house
program, respectively. Since its first flight in 2003, Etihad has received over 30 prestigious
air travel awards. The more notable awards include:

Best Business Class in the World 2009 (World Travel Awards)

World's Leading Airline 2009, 2010, 2011, 2012 (Wold Travel Awards)

World's Best First Class 2010 (Skytrax)

Best First Class catering 2010 (Skytrax)

Best First Class Seat 2010 (Skytrax)

ETIHADS CORE VALUES

Etihad airways follow 5 corporate values. They are acting positively, caring about detail,
taking responsibility, delivering best practice and inspiring the customers (Etihad Vision,
2010). These values cover major important points which are necessary for the success of the
business. Etihad believes in being open, honest and supportive in everything they do. They
like anticipating the needs of the customers and always strive to be consistent. Etihad
encourages staff to take the initiative, be proactive and persistent. They are very passionate
and care about their customers. Delivering the best, safe and most efficient service is one of
their main priorities. Etihad makes sure the people who are part of their family understand
and maintain these values so that they can uphold their standard consistently.

COMMITMENT
Etihad airways is really committed in its cause to become the best airline in the world. They
manage to balance all aspects of the company and keep it healthy for the smooth flow of
business. Nowadays the trend is to make important contributions to the environment and
perform well on the corporate social responsibility platform. Companies believe that by
addressing CSR and improving the environment, the profitability, risk level and the
performance of an organization improves and there are long term rewards. Despite this
statement being true, companies must not just focus on this aspect. Etihad shows commitment
and sustainability by focusing not only on the environment and CSR, but also finances, jobs
and development of local communities, diversity, staff and sponsorships (Etihad About Us,
n.d). Some noticeable examples are:

Finance (2012)
o Total revenue up by 17% from 2011 to US$4.8 billion
o Net profit of US$42 million
Jobs and local communities
o Increased number of employees in 2012 by 18%
o UAE nationals comprise 22% of the workforce
o All female Emirati contact Centre in Al Ain
Diversity and staff
o More than 14,500 staff representing 125 nationalities
o Dedicated Etihad Airways Medical Centre
o Regular wellness days with preventative care checks
o Fit 2 Fly leisure facilities in major residential locations
Sponsorships
o 10-year partnership deal with Manchester City Football Club
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o Formula 1 Etihad Airways Abu Dhabi Grand Prix

o Continued sponsorship of Harlequins Rugby Club, GAA Hurling in Ireland

and the Etihad Stadium Melbourne

Environment
o 24% improvement in carbon emissions per passenger kilometer since 2006
o Invested in aviation biofuel development in Abu Dhabi and the first biofuel
flight in 2012
o A successful water saving campaign for staff in 2012

VISION AND MISSION

As the National Airline of the United Arab Emirates, we seek to reflect the best of Arabian
hospitality - cultured, considerate, warm and generous - as well as enhance the prestige of
Abu Dhabi as a center of hospitality between East and West
Our goal is to be a truly 21st century, global airline, challenging and changing the
established conventions of airline hospitality
As well as a relaxing experience, we also strive to make travel safe and environmentfriendly by practicing the highest global standards in both these areas
(Etihad Vision, 2010)
We can see that the vision of Etihad airline is also closely linked to its Arabian heritage in
particular. The vision of the airline is also to become one of the global airliners that exude a
truly 21st century, where challenges, and changing environment, plus an engaging vision to
break the convention, constitutes its deep rooted vision.
Etihad Airways mission like any considerate corporate is to give a refreshing welcoming to
their guest, where travel should be safe and secure in an environment that is friendly, and
where global standards in both terms is practiced, be it hospitality or in the technical aspects
in assuring a safe journey for its guests.

HISTORY
Etihad Airways was established as the flag carrier of the United Arab Emirates in July 2003
by Royal Decree issued by Sheikh Khalifa bin Zayed Al Nahyan. It started with an initial
paid-up capital of AED500 million. Services were launched with a ceremonial flight to Al
Ain on 5 November 2003. On 12 November 2003, Etihad commenced commercial operations
with the launch of services to Beirut, and has gone on to become the fastest growing airline in
the history of commercial aviation.
In June 2004, the airline made an US$8-billion aircraft order for five Boeing 777-300ERs and
24 Airbus aircraft, including four A380-800s.
The airline announced what was the largest aircraft order in commercial aviation history at
the Farnborough Airshow in 2008, for up to 205 aircraft 100 firm orders, 55 options and
50 purchase rights.
As of February 2013, the airline operates passenger and cargo services to 86 destinations
around the world from its home base in Abu Dhabi.

LOYALTY PROGRAM
Etihad Airways is very intelligent in the way they chose to name their economy, business, and
first classes. The most premier of these would be the Diamond First class, followed by the
Pearl Business class, and then the Coral Economy class. Diamond is seen as the obvious
most expensive and beautiful object here, a theme that is shared by the product and services
waiting for Etihad's first class customers. Pearl is not considered to be as expensive as
diamond, but none the less still an object of beauty to be admired. Last but not least, Coral
economy class. To name their economy class coral was perhaps their smartest move,
because corals are natural living beings, usually not bought and sold, but very beautiful
nonetheless. You could say the message Etihad is trying to send here is that: Even though
you are flying economy class, a cheaper option, it is still beautiful in its own regard. This
instills a value into customers, making them feel that Etihad's economy class can be held in
higher regard than most other airlines who do not do the same.
Etihad has its own highly successful, award winning Frequent Flyer Program. Etihad's
loyalty programs consists of 2 types: Etihad Guest and Etihad BusinessConnect.

Etihad Guest- This program is Etihad's FFP, designed in order to maximize the rewards for
customers, and is successful through its flexibility and lack of restrictions. Below are the
benefits of being part of Etihad Guest according to their website:
Immediate rewards with our 1MileRedemption feature, fly once and enjoy instant
rewards.
No blackout periods Guest Seats are available on all flights, and if a seat is available, you
can book it.
Anytime availability all seats, including the very last seat, are available at any time.
Redeem Open Seats at a mileage cost equivalent to the commercial price of the seat.
The widest choice redeem on flights, products or services using our exclusive Reward
Shop.
Miles plus cash decide how many miles you want to use and contribute the rest in cash
using our Miles and Cash feature. You even earn miles on the actual cash spent on flights.
Miles that are worth more one mile can be worth much more than in any other program..

What stands out here is that Etihad is able to yet again instill value into its customers by
making each mile worth more in the eyes of the customer. 1 mile earned from Etihad airlines
allows the customer to immediately start redeeming items at the online reward shop. The
flexibility is evident through Etihad's exclusion of any blackout periods or seat choice
limitations. Because Etihad Guest miles can be used and earned in countless ways, it gives
customers added incentive to fly with Etihad, knowing that their mileage seems to have more
value when compared to most other world class airlines.
Etihad Guest miles can be used to benefit the customer in a number of ways:
1.

Create a personal account online where guests can manage and claim miles with ease.

The website
2.

Guests can immediately use any miles they earn to make purchases on Etihad's online

reward shop. This includes purchases on holidays, shopping, and more.

3.

Upgrade to the next cabin level using Etihad guest miles.

4.

Earn miles when shopping, driving, or staying with one of Etihad's program partners.
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5.

Transfer your mileage to up to 8 family members and share your Guest mileage as

you please.
6.

Earn Etihad Tier miles/segments.

Etihad BusinessConnect- This program is quite unique and is tailored towards maximizing
the benefits for businesses when flying with Etihad. Etihad goes a step further in extending
the benefits of Etihad Guest to reward loyal companies and their employees for traveling with
Etihad.
Flying as a company or employee sees many benefits for your business.
1.

Employees of the company will earn their usual mileage but an additional 60% of the

mileage will be added for your company when your employees are flying Diamond First
Class or Pearl Business Class.
2.

In Coral Economy class, your company earns 30% of the miles that employees fly,

along with the employees individual mileage.

3.

Miles earned from BusinessConnect can be redeemed for countless rewards, much

like for Etihad Guest.

The best example that illustrates just how beneficial BusinessConnect really is for businesses
comes from Ethihad's official website: If 7 of your company's employees take one Pearl
Business Class trip to London, your business would earn enough miles to cover a Coral
Economy flight to London, with almost 3000 miles left over to spend on products from the
Reward Shop.

FINANCIAL PERFORMANCE
As Etihad Airways is a registered private company, it does not have obligation to post its
financial statements hence, facts and figures regarding the companys financial performance
is limited to information disclosed in the companys annual reports.
Despite its young age and the financial crisis of 2008 Etihad Airways has come on top as one
of the leading carriers in the Middle East region. As of yearend 2012 Etihad airways reported

revenue was 4.8 Billion U.S. dollars, a 17% increase over the previous years. Its net profit
being 42 million U.S. dollars, a 200% increase over the previous year.

FINANCIAL POSITION
A) Revenue from Sales & Services:
Etihad Airways revenue in YTD 2012 was 4.8 Billion U.S. Dollars, a 17% increase over
2011s reported 4.1 Billion U.S. dollars. This increase in revenue can be attributed to the
following:

Etihads code sharing and equity strategy helped the company earn an additional 600

million U.S. dollars.

Increase in the number of passengers using Etihad Airways.

o

Passengers using Etihads services totalled 10.2 million persons, a 23%

increase over the previous year.

Increase in revenue from cargo services

o

Etihad Cargo brought in revenue in excess of 73.8 Million U.S. dollars, up

from 2011s figure by 10%.

Cost reduction in terms of fuel efficiency.

B) EBIT (Earnings before interest and taxes)

Earnings before interest and taxes takes into accounts all profits before deducting interest and
tax expenses. This figure is used to analyse and compare profitability between different
companies as it negates the effects of financing and accounting decisions.
As of yearend 2013, Etihad Airways EBIT was 170 Million U.S. dollars, a 24% increase over
the previous years figure of 130 Million U.S. dollars.
C) EBITDAR (Earnings before interest, taxes, depreciation, amortization and
restructuring or rent costs)
Earnings before interest, taxes, depreciation, amortization and restructuring or rent costs is an
indicator of a companys financial performance. Unlike EBIT in EBITDAR two additional
non cash flows are included to give a better idea of the companys profitability. EBITDAR is
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used by firms that utilize extremely expensive assets that have to be written down over a long
period of time. EBITDAR includes either rent costs or restructuring costs but not both.
Commonly used by firms that have rent costs or that have undergone a significant
restructuring over particular period.
As of yearend 2012 Etihad Airways EBITDAR was 753 Million U.S. dollars, a 16% increase
over the previous year figure of 648 Million U.S. dollars.

Code sharing or code share is a business agreement or alliance between two or more airlines
where a passenger is able to buy a ticket with one of the airlines but fly or use the services of
one of the other airlines, which is part of the business alliance. The major advantage of code
sharing is that it allows airlines greater access to other cities without having to deploy more
aircraft or create new routes and at the same time allow for simplification of bookings for
passengers when using several different airlines. As of yearend 2012 Etihad Airways has 41
codeshare alliances providing over 300 destinations.
At the same time Etihad Airways has also followed an aggressive equity strategy which
involved the purchasing of stocks of strategically important airline corporation in order to
gain a controlling interest. Its largest equity stakes are:

40% share of AirSeychelles

29.21% share of Air Berlin

4.99% share of Virgin Australia

2.987% share of Air Lingus

Etihads combined codeshare and equity strategy resulted in approximately 600 Million U.S.
dollars of additional revenue for the airlines by year end of 2012. The strategy brought in 1.2
Million passengers to the Etihad network, most particularly Etihads partnership with Air
Berlin resulted in more than 300,000 passengers and 130 Million U.S. dollars in revenue
between both carriers.

FINANCING ACTIVITIES
In 2012 Etihad Airways raised a total of 663 Million U.S. dollars from three global banks to
finance the delivery of six aircraft. Four of the six aircraft were refinanced in the U.S. capital
market as Ex-Im Bank guaranteed bonds. A Request for Proposal for issued for the financing
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of nine aircrafts, totalling 1.5 Billion U.S. dollars. Additionally mandates were awarded for
the sale and lease back of four more aircrafts.
Etihads success has given the airline significant credibility over the few years of its
operations. Hence as a result Etihad now enjoys lines credit from several financial institutions
providing funds in excess of 6.5 Billion U.S. dollars for funding the airlines growth.
Risk Management:
In 2012 besides hedging to mitigate risks from foreign exchange, fuel costs and interest rates,
Etihad Airways also began to hedge for carbon emissions. In 2012 Etihads hedging volume
peaked at 3.4 Billion U.S. dollars: Etihad hedged 53% of its foreign exchange, 76% for jet
fuel exposures in 2013, 38% for jet fuel exposures in 2014 and 16% for jet fuel exposures in
2015.

EXTERNAL ENVIRONMENT
According to the Business dictionary, it defines External Environment as Conditions,
entities, events, and factors surrounding an organization that influence its activities and
choices, and determine its opportunities and risks. It is called operating environment. The
external environment is broken down into 3 parts:

General (dimensions in the broader society that influence an industry and the firms

within it)

Industry (set of factors that directly influences a firm and its competitive actions and

response)

Competitor (focuses on each company against which a firm directly competes)

A firms strategic actions are influenced by the conditions in all three parts.

GENERAL ENVIRONMENT
General environment is composed of dimensions in the broader society that influence an
industry and the firms within it. The general environment is made up of seven segments:

Demographic segment

Economic segment

Socio-cultural segment
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Technological segment

Global segment

Physical segment

Political segment

Etihad airways consists of Etihad cargo and Etihad holidays as well. It operates
approximately 1300 flights per week across 86 different destinations. Currently it has 89
aircrafts in its fleet with another 34 to be received 2014-2020. The target market for Etihad
airways is the Middle East, Europe, Australia, Asia and Africa. However their main target
markets are the Middle East and North Africa (also known as MENA: Example Bahrain,
Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Libya, Morocco, Oman, Qatar, Saudi Arabia, United
Arab Emirates etc) and Europe. The emphasis will be laid only on these two markets from
different perspectives in the demographic and economic segment.

1)

Demographic segment

Demographic segment is the identification of the market as a whole. The firm must determine
the way it will segment the market and then profile each segment. Then the firm will access
the advantages of marketing to each segment and will select the segment with the best
potential.
a)

Population size: this refers to the increase or decrease in the size of the total

population. It also involves the effects of rapid population growth on natural resources.
According to the World Bank, as of 2012 the current population of MENA is 321.6 million
people. MENA has had population growth of 3% annually since 1980. The declines in
mortality that occurred in the past 50 years in the developing world mostly benefited infants
and young children. In MENA, infant mortality (infants dying before their first birthdays)
dropped from close to 200 deaths per 1,000 live births in the early 1950s to fewer than 50
deaths per 1,000 live births at the turn of the 21st century.

Ratio of Population Size in 2000 to Population Size in 1950, by Major World Regions

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According to the World Bank, the current population of Europe is 509 million. Between 1
January 1960 and 1 January 2012 the population of the EU-27 increased by 101.1 million
inhabitants, which was a mean annualized growth rate of 4.3 per thousand inhabitants. One
major reason for the slowdown in the natural population growth is that women in the EU
have fewer children than was previously the case. In developed parts of the world, a total
fertility rate of around 2.10 live births per woman is currently considered to be the
replacement rate in other words, the level at which the size of the population would
remain stationary in the long-run if there were no inward or outward migration. The total
fertility rate in the EU-27 was well below replacement levels in recent decades. From a low
of 1.46 live births per woman in 2002, the total fertility rate in the EU-27 has subsequently
seen a slight recovery in many of the EU Member States, such that the average for the whole
of the EU-27 stood at 1.57 in 2011.

b)

Age structure
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MENA

From this graph we can see that the aging population of the MENA region is comparatively
less when compared to other regions (especially Europe). There is a lot of presence of youth
as well. Whether these young people become healthy and productive members of their
societies will depend on how well governments and civil societies invest in social, economic,
and political institutions that meet their needs. The fastest growth in the youth population will
be in places that are the least prepared economically: Iraq, the Palestinian Territory, and
Yemen.

EUROPE
14

Ageing society represents a major demographic challenge and is linked to several issues,
including, persistently low fertility rates and significant increases in life expectancy during
recent decades. Improvements in the quality and availability of healthcare are likely, at least
in part, to explain the latter, alongside other factors such as increased awareness of health
issues, higher standards of living, or changes in workplace occupations from predominantly
manual labor to tertiary activities. The average life expectancy of a new-born baby in the
world was estimated at 67.9 years (for the period 2005 to 2010): the value of this indicator
increased by 3.5 years compared with the period 1990 to 1995. In the EU-27, life expectancy
at birth is generally higher than in most other regions of the world and stood at 79.7 years in
2009.

c)

Income distribution

MENA

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We can notice from the graph that in MENA region, the rich are getting richer, while the poor
are at a stagnant level. This has always been the case in MENA because of the nature of
business available there. There is no emphasis on overall development of the region. There is
high income inequality.

EUROPE

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As can be seen from Figure there are signicant differences in income levels between the EU
Member States, and a substantial proportion of the income inequality between the citizens of
the European Union can be explained by differences in incomes from one country to another.
Of the EU countries, Lithuania has the lowest income level, with an average yearly equalized
disposable income of EUR 5,304per person, while Luxembourg has the highest level (EUR
29,153 a year). The former socialist countries cluster together at the bottom of the scale, with
average disposable incomes of under EUR 10,000. As is evident, people in the top section of
the income distribution in the former socialist countries have an average income that is
typical of middle-income earners in most Western European countries (France, Germany).
There are three Southern European countries, Portugal, Greece and Spain, where average
incomes fall between EUR 10,000 and EUR 15,000, with one of the former socialist
countries, Slovenia, being grouped with them. The largest group of European countries has
average incomes of between EUR 15,000and EUR 20,000, and, apart from Luxembourg, the
only country where the average level exceeds EUR 20,000 is the UK.

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OPPORTUNITES

The increasing population in both these regions provide Etihad the opportunities to

expand to different new destinations in these regions. Aside from expansion, the statistics of
population growth indicate more potential customers in the near future.

There is heavy inequality of income distribution in the MENA region and also

Europe. The rich are getting richer while the poor are stagnant. Etihad airways is all about
leisure and top class facilities. Therefore this can turn to be advantageous by ensuring that
this group of people choose Etihad airways.
Example: there are currently 21 flights to UK every week; 28 to Bahrain; 26 to Qatar; 25 to
Kuwait.
THREATS

The inequality of income is a disadvantage as well. It restricts growth and further

development of the company because it is still not reaching it optimum potential in terms of
revenue
Example: 1 rich person expenditure = 5 common people expenditure. With average equal
distribution of income, the rich person will spend money, as well as the other 5 common
people.

Development of human resources in the MENA region is dependent on the

development of youth by the government of the respective countries.

2)

Economic segment

Economic segment of the general environment means the economic stability in the markets
that the company is competing. It includes understanding and analyzing the global market as
well because policies which directly dont have to do with you may indirectly affect your
business in the short run or long run. Understanding the economic segment is important
because it can have profound influence on organizational behavior and performance.
Economic growth, interest rates, the availability of credit, inflation rate, foreign exchange
rates, and foreign trade balances are among the most critical economic factors to be
considered. Economic growth helps organizations forecast the consumer demand for products
and services. After that they make critical decisions and allocate resources accordingly
(expansions). Inflation and the availability of credit, among the other factors, influence
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interest rates that organizations have to pay. High interest payments can constrict the strategic
flexibility of firms by making new ventures and capacity expansions expensive. The main
components of economic segment are:

Inflation rates

Interest rates

Trade deficits or surpluses

Budget deficits or surpluses

Personal saving rate

Business savings rate

Gross domestic product

Here we will analyze the two main markets of the Etihad airways, which are MENA (Middle
East and North Africa) and Europe.

a)

MENA ECONOMIC ANALYSIS

History

Although MENA countries suffered the consequences of weak economic activity in industrial
countries in the early 1990s, the crisis triggered by Iraq's invasion of Kuwait, and
unsatisfactory oil-market conditions, the region achieved positive rates of real economic
growth throughout 1989-94 with GDP expanding at an annual average rate of 3.2 percent.
This growth exceeded that of Africa (1.6 percent) and Latin America (2.9 percent); only
Asian countries recorded higher GDP growth (7.5 percent). However growth performance
varied among various country groups and countries in the region:

Oil exporters as a group have registered declines in real GDP growth since the

beginning of the 1990s, reflecting weakening world oil markets.

As regards non-oil exporting economies, countries that embarked earlier on economic

adjustment and structural reform programs--including Israel, Jordan, Mauritania, Morocco,

and Tunisia--performed relatively well, even though Jordan's economic adjustment was
disrupted by the 1990-91 regional crisis, and Morocco and Tunisia suffered droughts.
19

Countries with civil strife and armed confrontation--such as Algeria, Djibouti,

Lebanon, Somalia, Sudan, and the Republic of Yemen--recorded generally very low or
negative GDP growth, but the ending of hostilities in a number of cases has been followed by
reconstruction and rehabilitation, giving impetus to growth.
Inflation in MENA countries has been fairly restrained. In 1989-94, the weighted average
consumer price index of the region increased annually by about 16 percent, compared with 47
percent for developing countries as a group. At the individual country level, 12 MENA
countries achieved single-digit inflation during 1989-94, and five countries (Bahrain, Kuwait,
Oman, Qatar, and Saudi Arabia) had better inflation performance than that of the average for
industrial countries. Egypt significantly reduced inflation during this period by strengthening
fiscal and monetary policies
The external position of the MENA region deteriorated sharply in early 1991, but then
improved steadily. As a ratio to GDP, the current account deficit (including official transfers)
averaged 5 percent during 1989-94, compared with 1.3 percent in developing countries as a
group. Among developing countries, sub-Saharan Africa was the only region to register larger
current account imbalances.
The volume of exports of the MENA region increased at an annual average rate of 5.6 percent
during 1989-94, compared with 8.4 percent for developing countries as a whole. On average,
export growth in oil exporters was better than in non-oil exporters, which nevertheless
experienced increased export volume growth during 1991-94. The growth in import volumes
in the MENA region was lower than the growth in export volumes during 1989-94-amounting to an annual average of 2.8 percent. Within the region, the annual average growth
in imports of oil exporters was slower than that of the remaining countries, reflecting the
sharp decline in imports by the oil exporters during 1993-94, but also the increased access to
financing by some non-oil countries associated with their adjustment process.
MENA countries adopted various approaches to financing external current account deficits.
The GCC countries (Gulf Cooperation Council: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia,
and the United Arab Emirates) relied heavily on using their gross foreign assets, but also
resorted to some external borrowing. Non-GCC countries mainly relied on medium- and
long-term loans from official sources. Inflows from private sources were important for only a
few countries (Egypt, Israel, and Lebanon), while most foreign direct investment in the
region was accounted for by flows to Egypt, Israel, Morocco, and Tunisia.
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Current scenario

The MENA countries may be divided into two groups: (1) oil-exporters which include the six
GCC countries (Bahrain, Kuwait, Qatar, Oman, Saudi Arabia, and the UAE), Algeria, Libya,
Iraq, and Iran; and (2) net oil-importers which include Egypt, Jordan, Lebanon, Morocco,
Syria, and Tunisia. The MENA countries had a combined GDP of about $2.9 trillion and a
population of about 321 million in 2012. Most currencies in the region are pegged to the
dollar or to a basket of currencies, and monetary policy is therefore largely constrained.
Endowed with about 70% of the world's proven oil reserves and 50% of proven gas reserves,
MENA oil-exporters play a critical role in the world energy market. Earnings from oil and
gas accounted for about 73% of total exports and 78% of budget revenues in 2012.
Most of the regions oil exporters continue to post strong no hydrocarbon growth (an average
of 5.5% in 2012), and fiscal and current account surpluses have been buoyed by higher oil
prices in recent years. Over the medium term, stronger growth will be contingent on building
diversified capacities with reduced dependence on hydrocarbons through sustained structural
reforms.
For the oil importers, the economic toll from the unrest, political uncertainty and weak
external demand have led to weak real GDP growth of around 1% in 2011 and 2012 (as
compared with an average of 5% in 2001-2010). Tourism and foreign direct investment (FDI)
remain weak, and are still far below pre-revolution levels. Most businesses have retrenched.
The Euro Area recession and sporadic violence have depressed economic activity in Egypt
and Tunisia, while Jordan and Lebanon have been severely impacted by the spillover from
the civil war in Syria. The prospects in 2013 remain challenging. We expect economic
activity remain weak in Egypt, but improve in Morocco, Jordan and Tunisia.

b)

EUROPE ECONOMIC ANALYSIS

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Europe (Western) emerged from recession in the second quarter of 2013, after six consecutive
quarters of declining GDP. Economic activity continued to expand in the second half of the
year, but at a weak pace. Annual growth rates were negatively affected by the very strong
downturn at the end of 2012 and beginning of 2013. GDP in the EU-15 therefore declined by
0.1 per cent in 2013, but project to strengthen to 1.4 and 1.8 per cent in 2014 and 2015,
respectively. The continuous weak recovery from the Great Recession has caused the output
level of the European Union (EU) to be 2.8 per cent below the potential. There are, however,
considerable differences across countries. Among the large countries, the United Kingdom of
Great Britain and Northern Ireland grew by 1.4 per cent in 2013 and can strengthen to 2.2 per
cent in 2014, while France and Germany had slow growth of 0.1 per cent and 0.4 per cent,
respectively, in 2013, but can pick up to 0.8 per cent and 1.9 per cent in 2014. The crisis
countries are showing signs of turning the corner, but they remain in delicate positions. Italy
contracted by 1.8 per cent in 2013can grow by 0.8 percent in 2014; similarly, Spain
contracted by 1.2 per cent in 2013, and can return to positive growth of 0.9 per cent in 2014.
Among the smaller crisis countries, Cyprus and Greece are expected to continue to contract
in 2014.
Export volume growth remains exceedingly low. In the euro area, export volumes grew by
only 1.2 per cent in 2013. The appreciation of the euro during the year further dampened
exports. As regional and global demand pick up, exports are expected to follow suit,
supported by the assumed depreciation of the euro. Import volumes were even weaker in
2013, estimated to have declined for the second consecutive year. Some rebound is seen for
2014 and 2015, as regional growth improves. Although the depreciation of the euro could
negatively affect imports, the evolution of demand will be the dominant factor.
Euro area annual inflation was 0.7% in October 2013, down from 1.1% in September. A year
earlier the rate was 2.5%. Monthly inflation was -0.1% in October 2013. European Union
annual inflation was 0.9% in October 2013, down from 1.3% in September. A year earlier the
rate was 2.6%. Monthly inflation was -0.1% in October 2013 (Eurostat, 2013). In October
2013, the lowest annual rates were observed in Greece (-1.9%), Bulgaria (-1.1%) and Cyprus
(-0.5%), and the highest in Estonia and the United Kingdom (both 2.2%) and Finland (1.7%).
Compared with September 2013, annual inflation fell in twenty-three Member States,
remained stable in one and rose in four. The lowest 12-month average rates up to October
2013 were registered in Greece (-0.4%), Latvia (0.3%) and Sweden (0.5%), and the highest in
Romania (3.7%), Estonia (3.5%), Croatia and the Netherlands (both 2.9%).
22

Annual inflation (%) in the euro area and European Union

For the new EU member States, countercyclical fiscal policy actions remain limited. In 2013
conventional and unconventional monetary policy measures were the main tools used to
bolster economic activity in the countries with flexible exchange rates. Policy interest rates
were kept near zero in the Czech Republic and cut, within the course of the year, to recordlow levels in Hungary, Poland and Romania (see figure below). In addition, the Hungarian
National Bank announced the Funding for Growth Scheme, offering funds at zero interest
rates for commercial lenders, in order to help small and medium enterprises obtain low-cost
credits and to convert their foreign currency loans into the domestic currency. The Czech
23

National Bank announced direct interventions into the currency market, in order to weaken
the exchange rate and to support exports, and to prevent deflation.

Opportunities

There is strong economic development in the GCC countries, which are Bahrain,

Kuwait, Qatar, Oman, Saudi Arabia, and the UAE. This is due to the vast amounts of oil
reserves available within the country as well. Despite the Arab spring these economies are
performing well, therefore strategies can be made to further segment the market and target the
people from these countries. While the services to the other countries within the MENA
region with slow economic growth will be the same. That is no increase or decrease. More
destinations and routes can be developed within these GCC countries considering their
economic climate.

2014 seems to be showing good signs for the economy of Europe. However there are

still countries which have a long way to climb. They include Spain, Italy, and Greece.
However the economy of UK is stable, which is a good sign considering they are the
destination in which flight services are offered the most. The EU states are showing signs of
good economy growth considering their interest rates and flexible economic policies. The
reason the government of these countries are doing this is because they want their economy
24

to grow and thrive. Therefore new plans, routes and expansions can be developed for Eastern
Europe, which is Czech Republic, Romania, Hungary and Poland. At the moment there are
more routes to Western Europe than eastern from Etihad airways.
Threats

The slow economic growth of some MENA countries due to the Arab spring or

general economic condition is a serious threat. MENA is one of the main markets for Etihad
and are the reason behind their emergence. With slow growth and civil unrest there is less
revenue generated from what can really be achieved.
3)

Socio cultural segment

This is a collection of social factors affecting a business and includes social traditions, values
and beliefs, level of literacy and education, the ethical standards and state of society, the
extent of social stratification, conflict, and so forth.
Socio-cultural environment consists of factors related to human relationships and the impact
of social attitudes and cultural values on the business of the organization. The beliefs, values
and norms of a society determine how individuals and organizations should be inter-related.

This segment is important because the attitudes and values of society influence and thus are
reflected in changes in a societys economic.
1. Workforce composition (increase in the number of women, and increased ethnic and
cultural diversity etc)
2. Changes in attitudes about the quality of work life
3. Environmental concerns
4. Shifts in work and career preferences, including an increase in new business formation by
women
5. Shifts in product and service preferences

a)

Woman in the Arab world:

25

According to some observers, Arab women have not only gained in power and importance as
economic actors in almost all of the MENA economies but are also increasingly identified in
national development plans as indispensable sources for future and private sector-driven jobcreation, innovation and diversification (World Bank 2007; CAWTAR / IFC 2007; Metcalfe,
2011; Metcalfe and Rees, 2010. However with regards to political and economic participation
of women, many Arab countries have still a long way to go to catch up with other regions of
the developed as well as developing world (UNDP, 2006; Yuval-Davis, 2006, 2009). For
example, Islamic law does guarantee womens rights to own property and keep control of
wealth brought into marriage, banks in many Arab countries still require female entrepreneurs
looking for financing for their own ventures to have their husbands or brothers co-sign on
loans. In addition, strict gender segregation complicates womens lives both in business and
at work and renders female employment highly expensive (Badran, 2005). In Arab countries
womens participation is the lowest in the world. The same is true for companies managed
and/or owned by women (World Bank 2007, 2011).

However due to globalization, opportunities for womens transnational network organizing

has increased (Moghadam, 2010; Castells, 2010), although it is recognized that often these
coalitions are restricted via class, tribe and political affiliations (Metcalfe and Rees 2010;
Metcalfe, 2011). There is no doubt however, that the growth of womens NGOs especially in
field s of education, employment rights and social welfare, has contributed to feminist
consciousness raising efforts, although there is great deal of variety across the region in terms
of the legitimacy and their ability to act independently from political authorities (Metcalfe
and Mutlaq, 2011).

Nonetheless, there has been a significant growth in the number of businesswomens forums
(which usually have an NGO status), especially in the GCC. These organizations have
facilitated efforts to educate and develop womens knowledge in areas of employment and
family rights, leadership, communication and community development. Organizations such
as the Emirates Businesswomen Council, the Qatar Business Women Forum (QBWF), the
Tunisian Womens Entrepreneurs Union and the Egyptian Businesswomen Association
(EBWA) provide different forms of assistance for female entrepreneurs. Some of them are

26

independent associations; others are closely connected to or form part of the local Chambers
of Commerce and Industry or their national federations as special councils or committees

At the regional level, the Arab Businesswomen Council was established under the auspices of
the Arab League in Cairo serving as an umbrella organization for national and local
committees and in the international arena, organizations like the Arab International Womens
Forum (AIWF), founded in London in 2001, aspire to link Arab business women with their
counterparts in Europe, the US and other regions of the world.

b)

Islamic beliefs:

As we all know the religion of Islam is very strict with certain mannerisms and code of
conduct from fellow Muslims. Etihad is a Middle East airline and therefore they must fall in
accordance with such beliefs. For example No pork, only halal food, no alcohol, conservative
women dressing etc. it is very important for Etihad to follow these customs especially when
their top market is MENA. They must make sure they comply with the needs of their end
users to its potential. Also since MENA is not only their market, they have to be flexible and
adapt when flying over Europe. For example when on Muslim territory still, no alcohol can
be served until you passed the border; switching to halal food for Muslims to other food to
rest of the people in delivery of service; decent dress code of the women onboard, must not
be vulgar and loud.

Opportunities

Seeing the amount of influence women are starting to have in the Arab world is

interesting. This creates opportunities for Etihad to perform CSR activities around this topic
and show their support for women, which will attract international appeal. Activities such as
education programs or aid for women in these countries can be developed in order to build
and strengthen further local ties.

The level of education for women in Arab countries is high. However they are

unemployed because of the society preference to male dominance. Educated women can be
27

recruited for Etihad and undergo a training program where they are employed in the air or on
the ground. Hiring a lot of educated women, especially from these times at the Arab countries
will add further diversity to the workforce. It will add quality and good will considering how
times are changing and the role of women importance is increasing.
Threats

The biggest threat in this segment can only be slip in professionalism while handling

the local customs of different countries. The staff need to be well coursed about the customs
so that they provide efficient service to different types of customers accordingly. There can be
no room for error because a small mistake can prove to be costly because these customs are
to do with religion. For example: serving non halal food or pork to a strict Muslim by
mistake. Such actions will lead to bad PR, therefore the service must be flawless.

4)

Technological segment

Technological environmental factors are meanwhile of a great importance, especially for

industrial companies, which underlie a fast technological change. The increasing speed of
technological changes, indicate risks or chances for a company. Particularly producing
companies are affected of that fast evolution. Technology for an airline company is extremely
crucial because they are proportional to each other. One cannot afford to be not updated with
the latest trends and adopt them to their respective airlines.
a)

Change in technology of aircrafts

When it comes to aircrafts we think of only 2 companies: airbus and Boeing. These
companies have been in direct competition with each other for a very long time. Airbus is
European based while Boeing is American. At present Boeing seem to have competitive edge
over airbus because of their number of orders, delivery of service and cost. For example:

Boeing 787 had 876 orders from 53 customers; while A350 had 505 orders from 32

customers

Boeing 787 costs $150-200 million, while airbus costs $225-285 million

Latest model from Boeing, and NASA development:

In the Dubai Air Show, Boeing stole the show with its new commercial aircraft model
called the 777x for the time beingwhich the company claims will chug down 12 percent
28

less fuel than todays planes. It's the latest in a long string of innovations working to make
airplanes more efficient in order to lower carbon emissions and cut costs for the transitioning
industry. The most futuristic of the 777xs energy-saving features is its foldable wings, which
span 233 feet in flight and fold up once the plane lands, shortening the wingspan by about 20
feet. The design makes it possible to better navigate the massive vehicles around an airport,
while still maximizing efficiency when flying. The company hails it as the future of flight
unfolding. The model will be able to carry 400 passengers, while still burning 20 percent
less fuel. It received 259 orders after being presented in Dubai, and is set to hit the market by
2020. Boeings new jet is just the latest in the green aircraft arms race. NASA and Boeing are
working together on this project. They tested the first full flight test of a new high-tech wing
that can redirect airflow to make the plane more aerodynamic, reduce drag, and in turn save
energy. The technology, called Active Flow Control, places small computer-controlled
devices on the wings that detect air patterns and can manipulate them for maximum
efficiency. It comes out of NASA's Environmentally Responsible Aviation projectpart of
the oft-overshadowed "Aeronautics" division of the National Aeronautics and Space
Administration.

b)

Technologies to improve passenger service

Power ports and storage

The first impact of todays tech-toting passengers is on cabin hardware. Airlines around the
world are responding to the large number of passengers carrying smartphones, notebooks,
tablets and e-readers by equipping seats with power and USB ports. A number of airlines and
interior suppliers are also looking how to integrate passengers own devices with the design
of the seat. Besides creating storage space for personal electronic devices for the more
spacious seating arrangements in Business Class, several seat manufacturers are also
beginning to incorporate smartly designed spaces in Economy seats where passengers can
store their mobile device

Tracking & tracing

Online tracking and tracing of packages shipped via parcel delivery companies such as FedEx
and DHL has been possible for years, and has even spread to other sectors such as pizza
delivery. In a move to make the baggage process more transparent for customers, Delta Air
29

Lines Track Checked Bags service aims to give passengers some peace of mind. As Delta
scans the bag tags during each part of the journey, passengers can track their baggage in realtime as it makes its way through the Delta system. Available for domestic flights, Delta
passengers can use Deltas smartphone app to track their checked baggage with the bag tag
number that they received at the time of baggage check-in. Since Delta has equipped all its
domestic aircraft with GoGos in-flight Internet passengers can check up in the air whether
their bag has made it on their flight. According to Delta, one in 20 passengers who check a
bag, track their bag and as a result, and the airline has seen a significant improvement in
performance and customer satisfaction. A similar service has just been launched by US
Airways as well. Luggage tracking just one of the early examples of how providing
passengers with real-time information will increase their experience, so expect many more
personalized notification services to follow.

Customer service

In the past year, airlines such as Emirates, British Airways, Iberia, KLM and EVA Air have
equipped their pursers with tablets. This allows the cabin crew to see which previous trips a
passenger has taken with the carrier before and based on this, know their food, wine and
seating preferences, or any issues a customer had during their previous travels. One of the
largest initiatives in this area comes from British Airways, which has provided 2,000 senior
cabin crew across its long and short-haul network with an iPad featuring its Enhanced
Services Platform. Consisting of several apps that allow flight attendants to store and receive
relevant passenger details in real-time, such as itineraries, meal preferences and other data
items, the airline aims to offer its passengers a more tailored in-flight service.

Connected crew

Obviously, the next step is to connect the crew tablets to the Internet as the availability of
aircraft with onboard wifi grows. This will close the customer service loop for airlines, as
they will be able to connect with crew and passengers up in the air. For example, iPads used
by pursers onboard British Airways Business Class-only service between London City
Airport and New Yorks JFK can already get live updates throughout the flight, thanks to the
aircrafts inflight connectivity provided by OnAir.
30

Opportunities

The opportunities from this scenario are that Etihad can learn from technological

changes and market research and adopt the same policies. By this I mean installing the
charging port, on air wi fi, connected crew, customer service and baggage tracking as
explained above. Etihad is already up to date with its technological trends in terms of fleet
and services but there is always room for more improvement. Etihad is known for quality
service and hospitality, and if technological needs of the customers is the latest trend, one
must adapt to it and follow them. This leads to increase in service quality as well

Boeing are coming up with new innovative technology. They are working side by side

with NASA for the future of aviation. Therefore Etihad must follow their research carefully,
strategize the orders of the fleets, so that they can be ready when the time comes. Etihad has
abundant financial backing therefore it wouldnt be a problem. All they need to do is keep
stability, grow upwards and stay up to date with the technological trends and machinery.
Threats

Technology is changing every. Therefore careful planning and strategic thinking has

to be done before purchasing huge fleets from Boeing or Airbus. No matter how new the
technology, there is always a better one that will come out. Therefore a certain sense of
balance must be followed when making such large purchases and long term approach must be
applied. Failure to do so will lead to misallocation of financial resources which will affect
revenue.
5)

Political and Legal Segment

Political and legal factors are here regarded as a unit. They refer to framework given by
politics. The legal frameworks, which can be binding for regions, nations or on an
international basis. The frameworks deal with economic issues or issues concerning the labor
market. Subsidies for instance fall in the category of economic issues. With respect to the
labor law of a country, it can highly influence location decisions, too. If e.g. the dismissal
protection in a country is very good, a firm may tend to choose a country with a more flexible
hire-and-fire-system. Furthermore, the stability of a political system is a real important aspect
for most firms. However in this segment we will analyze the Arab spring situation, since it
has been a highlight for the past 2 years.

31

a)

The Arab Spring

The Arab Spring is a term for the revolutionary wave of demonstrations and protests (both
non-violent and violent), riots, and civil wars in the Arab world that began on 18 December
2010.By December 2013, rulers have been forced from power in Tunisia, Egypt (twice),
Libya, and Yemen; civil uprisings have erupted in Bahrain and Syria; major protests have
broken out in Algeria, Iraq, Jordan, Kuwait, Morocco, and Sudan; and minor protests have
occurred in Mauritania, Oman, Saudi Arabia, Djibouti, Western Sahara, and the Palestinian
territories.
The protests have shared some techniques of civil resistance in sustained campaigns
involving strikes, demonstrations, marches, and rallies, as well as the effective use of social
media to organize, communicate, and raise awareness in the face of state attempts at
repression and Internet censorship.
The Arab Spring is widely believed to have been instigated by dissatisfaction with the rule of
local governments, though some have speculated that wide gaps in income levels may have
had a hand as well. Numerous factors have led to the protests, including issues such as
dictatorship or absolute monarchy, human rights violations, political corruption, economic
decline, unemployment, extreme poverty, and a number of demographic structural factors,
such as a large percentage of educated but dissatisfied youth within the population.

b)

Effects of Arab Spring:

Emigration is expected to increase in those countries most affected by the Arab

Spring. Emigration to GCC countries, which already host significant shares of Arab
immigrants, is expected to rise. Numerous accounts have been reported of emigrants fleeing
from Northern Africa to Europe.

In crisis situations such as the Arab Spring, the first reaction of governments is to

increase salaries and jobs in the public sector as a short-term response to social discontent.

The public sector in the MENA region acts as a magnet for young graduates attracted

by high salaries, employment protection, and a special social status. The position of the
public sector as a prime target for employment may create incentives for individuals to
32

acquire knowledge and skills in areas demanded by that sector, thus reducing the pool of
qualified candidates for the private sector.

The widespread political and social instability product of the Arab Spring and

associated uncertainty in several MENA countries has had direct negative economic effects in
those countries most affected by turmoil. It has also indirectly benefitted the more stable
resource-rich, labor-importing countries, notably Saudi Arabia and, to a lesser extent, Kuwait,
where rising energy prices and increasing oil production fuelled GDP growth
Opportunities

Fighting corruption and strengthening the rule of law are essential for economic

growth of any country. That is the transition that the Middle East is going through right now.
Even though their economy (civil unrest states only) are at the poor receiving end, there is
promise for better future development when all this is done and dusted. Therefore Etihad
must continue to show support to these countries and take the opportunity to do so by not
abandoning destinations or routes from these places and keep it flowing normally. In fact they
can plan more services as well. For example in 2012 Etihad planned more services to Egypt
despite the crisis. There is opportunity for long term results in this method; because there is
always silence after the storm.
Threats

Slow collective economic growth due to the Arab spring is affecting the airline

currently. There are less passengers because tourism is low as well. If the situation gets worse
and is not resolved in the desired time period, it will affect the operations of the business.

Public sector acts as a magnet for the youth once the civil wars are over. This is due to

the package and money that they are offered. Etihad is a public joint stock company. It lies
more on the private side. Therefore there is a threat of losing good human resources to the
public sector.

33

6)

Global segment

a)

Qatar Airways introduces a F.C. Barcelona Boeing 777-300 ER logo jet

b)

Emirates and Jetstar Airways to codeshare

Emirates (Dubai) and Jetstar Airways (Melbourne) have announced an agreement which is set
to open up new destinations for Emirates passengers across Australia, New Zealand and
South East Asia as the Dubai-based airline continues to connect people, places and passions.
The codeshare includes seven domestic routes in Australia to add to the 50 that Emirates
already codeshares with an investor in the Jetstar Group, QANTAS Airways; four new routes
in New Zealand, six new routes between Australian and New Zealand and ten international
routes out of Singapore to Indonesia, Cambodia, Vietnam, Malaysia, Thailand and Hong
Kong.
c)

35% increase in demand for air travel will lead to a pilot shortage worldwide

34

According to a report conducted by CNN there is 35% increase in demand for air travel;
tripling of the region's airplane fleet; and up to nearly 13,000 new planes needed. Released in
August 2013, the Boeing Pilot and Technical Market Outlook for 2013-2032 forecasts nearly
half a million new commercial airline pilots will be needed to fly all the new airplanes
entering the world fleet over the next 20 years. There is also a shortage in ground crew.

Opportunities

Not to say Etihad must copy Qatar airlines, but something on a similar level can be

done in order to boost PR and advertising. Etihad airways are the proud sponsors of
Manchester City in the Barclays Premier League, and an aircraft can be designed with their
logo and colors all over it. Such an activity is only seen as an opportunity to increase your
brand value and name and advertising. Such designed planes can be reserved only for the
players or maybe open out to the fans of the club to when they are travelling across borders to
watch the matches.

Considering how Emirates planned to codeshare with Jetstar, Etihad can take this as

an example and study their competitors and come up with a better network to increase their
routes to different countries all around the world. Code sharing can help reach out to further
routes and expand your services to many more destinations.
Threats

According to the brief CNN report above, there is predicted to be a shortage of pilots

due to increase in demand of travel (35%). Etihad is a big company with many planes in its
fleet, therefore they must ready to tackle this situation from now itself before it turns into a
threat in the long run.
7)

Physical segment

Aviation and the environment

Fuel Efficiency

Fuel is the airline industry's second largest expense, exceeded only by labor. As a result,
increased fuel efficiency has been a top industry priority for many years, and the industry has
made giant steps in that regard. Since deregulation, many airlines have increased fuel
efficiency nearly 65 percent by:

35

investing in new, environmentally efficient aircraft and engines;

lowering cruising speeds;

using computers to determine optimum fuel loads and to select altitudes and routes

that minimize fuel burn;

o

using flight simulators rather than real aircraft for pilot training;

Keeping aircraft exteriors clean to minimize aerodynamic drag.

Most important, the airlines have invested, and continue to invest, billions of dollars in new
aircraft and engines that are far more efficient than the models they replace. The Airbus A320
and Boeing 737-300, for example, transport twice as many revenue passenger miles per
gallon of fuel than the DC-9 and earlier versions of the 737. In addition, they emit smaller
amounts of the gases of concern to scientists studying global warming and other
environmental issues.

The airlines, through international aviation planning groups, participate in various working
groups on aviation environmental protection. These groups are looking at many options for
the reduction of aviation emissions, including operational measures and market mechanisms.
Airline representatives also have participated in the development of the United Nations'
Intergovernmental Panel on Climate Change (IPCC) report on aviation's contribution to the
atmosphere, the first international environmental examination of any sector

Aircraft Emissions

Airline efforts to reduce emissions date back to the 1960s, with the earliest efforts focused on
reducing the highly visible smoke emitted from jet engines. By the late 1960s, engine
manufacturers developed cleaner-burning combustion chambers, and the dark streaks of
smoke produced by the first generation of jets all but disappeared from view.

Rising fuel prices in the 1970s led to further reductions in emissions as airlines demanded
(and got) more fuel-efficient cleaner engines and aircraft from the manufacturers. A study by
the General Accounting Office, published in 1992, found that aircraft emissions of
36

hydrocarbons and carbon monoxide declined 85 percent and 70 percent, respectively,

between 1976 and 1988, as more fuel-efficient aircraft entered the fleet. Emissions of
nitrogen oxide rose slightly during the period studied, by about 12 percent, because of the
higher engine temperatures required to increase fuel efficiency and reduce other emissions.
Compared with the first generation of jets, however, today's aircraft produce less than onequarter of the total amount of these three pollutants (HC, CO and NOx) per landing and
takeoff cycle.

While the increase in nitrogen oxide is a concern, it is important to note that aircraft emit
small amounts of NOx relative to other sources - about 2-4 percent of total man-made NOx
emissions. The engine manufacturers, the airlines, and the government are actively looking
for ways to significantly reduce those emissions in the future. Since NOx results from
burning petroleum products at very high temperatures, researchers are studying ways to lower
the temperature inside a jet engine during high-power operations, without jeopardizing the
fuel-efficiency gains and the reductions in other emissions achieved with the hotter engines.
Airlines account for less than 3 percent of total CO2 emissions from the burning of fossil
fuels such as wood, gas and oil. To cut aircraft emissions of CO2 further, airlines would have
to find a way to power their aircraft without burning fossil fuels, which appears impossible at
this time, or make further gains in fuel efficiency, which is where they continue to focus their
efforts. As engines become more efficient, they use less fuel and emit less carbon dioxide for
every mile flown.

Aircraft Noise

Although many people do not associate noise with pollution, the noise produced by jets has
been one of the airlines' biggest environmental challenges - one they have spent billions of
dollars to address.

Key to their noise-reduction efforts has been the development and introduction of new
technology over the years. Through various design changes, airframe manufacturers have
successfully reduced the noise created by the displacement of air as jets move through the sky
at high speeds. In addition, engine manufacturers have made great strides in reducing noise
by reducing the velocity of engine exhaust.
37

As technological breakthroughs have occurred, airlines have replaced the oldest, noisiest jets
with new ones that incorporate the new, quieter technology. The first generation of jets, such
as the Boeing 707, were replaced during the 1970s with quieter, Stage 2 aircraft, such as the
727. Now, Stage 2 aircraft have been replaced with even quieter Stage 3 planes, such as the
757. Today, only Stage 3 aircraft are flying.
Reducing noise at its source is important, but it is not the only way to lessen the impact of jet
noise on communities around airports. Airlines, airports and the FAA are simultaneously
pursuing other strategies.
For example, the FAA with airline support, provides grants to airports for soundproofing
homes, schools, churches and other structures near airports. In some cases, airport operators
are using federal grants to buy homes outright, then selling the property for commercial
redevelopment that is more compatible with the airport.
Of course, all such efforts can be canceled out by poor planning and zoning decisions. If
airports are to peacefully co-exist with their communities, it is essential that certain types of
development, particularly houses, be separated from airports.

Recycling

The airlines have implemented a wide array of recycling programs to reduce the amount of
solid waste they send to landfills and to conserve trees and other natural resources. Recycling
activities include:
o

aluminum can recycling by flight attendants and caterers;

greater use of metal utensils and ceramic dishes (rather than plastic and paper) aboard

aircraft;
o

paper recycling at airline offices;

use of engine oil from ground vehicles to heat maintenance shops;

recycling of old newspapers and magazines left aboard aircraft;

reclamation of glycol, the fluid used to de-ice aircraft, for re-use as a runway de-icer

or as antifreeze for automobiles;

38

recycling of batteries, scrap metal and used aircraft parts at maintenance bases;

donations of unwanted, shelf-stable foods such as cereal and crackers to food banks

for the poor;

o

donations to homeless shelters of partially used hotel soap and toiletries saved by

flight attendants;
o

Recycling of laser printer cartridges, video tapes and other used and unwanted office

supplies.

Fuel Management and Clean-Up

The airlines have taken steps to better minimize releases of fuel into the environment and to
cleanup historic fuel contamination. These steps include:

removal or reconstruction of underground fuel tanks, to prevent leakage into ground

water;
o

De-icing Fluid Management

The airlines have been developing a variety of methods to manage the environmental impacts
of aircraft de-icing/anti-icing practices, which include:

development of best management practices to limit the amount of de-icing/anti-icing

fluid used, consistent with safety concerns;

o

development of new de-icing procedures and products to limit the amount of de-

icing/anti-icing fluid released into the environment;

o

factoring environmental considerations into purchasing decisions;

Exploring ways to reduce environmentally harmful aspects of de-icing/anti-icing

products.

39

Opportunities

Etihad is Airways is committed fully to conduct its business in a way which ensures

responsible management of environmental issues. However with new environmental

techniques coming up, Etihad must try to adopt as many practices as they can in order to
achieve green efficiency. Being environmental friendly ads up to the goodwill of the brand
name automatically. Etihad must maximize its environment friendly practices in order to
satisfy the psychological needs of the growing consumerism market nowadays.

Aside from maximizing what you can do today, there is opportunity in the growth of

bio fuels or alternative fuels. Biofuels are alternative fuels that originates from living
organisms -- mostly plants and algae. They can also be derived from recycled cooking oil.
Biofuels are likely to be consumed near where theyre produced, they offer potential
additional benefits: emissions released during transportation will be reduced, as will transit
time. Therefore, while biofuels and petroleum-based fuels have virtually the same shelf life,
biofuels wont lose as much life in transit. Biofuels are also unlikely to be stored underground
or on a tanker in the same quantities as petroleum-based fuels, which lessens the associated
danger of spilling. Therefore Etihad must take this opportunity and start investing in bio fuels
projects in order to help the save fuel costs and have less environmental impacts.

Etihad Airlines, through IATA, are committed to sustainable growth: a 1.5%

improvement in aviation fleet efficiency every year; From 2020 carbon emissions will be
capped through carbon neutral growth; By 2050, net emissions from aviation will be half of
what they were in 2005

Threats

As we know, the fossil fuels are depleting from earth rapidly due the rapid expansion

of the society. It is not going to last forever and will run out one day. Airlines are literally
fuelled by these resources and without it, unless a new development occurs, it is almost
impossible to facilitate this level of flying we see today. Since these resources are depleting,
the prices of oil have been increasing over the past 2 decades. Oil is the second most thing
that airlines spend on after labor. Therefore with depleting resources and increase in fuel
price, this situation looks like a serious threat.

40

EXTERNAL ENVIRONMENT ANALYSIS

a)

Environmental scanning

Environmental scanning can be defined as the study and interpretation of the political,
economic, social and technological events and trends which influence a business, an industry
or even a total market. The factors which need to be considered for environmental scanning
are events, trends, issues and expectations of the different interest groups.
After analyzing the external environment, the events or trends that can influence the business
and the market are:

High level of income inequality in the MENA region. It can make or break a business

in terms of revenue depending on the marketing strategies adopted.

Slow and stagnant growth of the oil importing countries, while the GCC countries are

receiving strong economic growth. Mainly due to the oil reserves available in those countries.

The negative effects of the Arab spring on the economy and the airline industry

Europe is showing signs of recovery in 2014 due to the growth of new EU countries

and their flexible economic polices

New technological development of aircrafts which will be efficient and sustainable for

the future (Boeing collaboration with NASA Boeing 777x)

Investment in the development and commercialization of bio fuels or alternate fuels

Increase in travel demand, which will lead to shortage of pilots and staff in the future

b)

Environmental Monitoring

Environmental monitoring describes the processes and activities that need to take place to
characterize and monitor the quality of the environment. The activities done by Etihad to
monitor the environment are:

41

Despite the Arab spring, services are still being offered to these countries. There is

low tourism demand and slow economic growth, but Etihad continue to be unfazed by this
and are offering more services instead.

The strong economic development of the GCC countries and some places in Europe

(such as UK) are monitored. Therefore more services are being targeted at these regions due
to their economic growth. At the same time the situation of Eastern Europe is being
monitored due to their flexible economic policies.

Etihad is up to date with its technology of aircrafts. Recently they ordered 25 mini

jumbos 777x, and 30 of the 787-10 Dreamliner, and 1 777 for the cargo for a total of $25.2
billion. This shows that they are monitoring the latest technological trends and are up to date
with their direct competitors. New models of airlines bring more eco efficiency, therefore
Etihad are monitoring their environmental footprint as well.

c)

Environmental Forecasting

Forecasting is attempting to predict the nature and intensity of the micro environmental and
macro environmental forces that are likely to affect a firm's decision making and have an
impact upon its performance in a given period. The activities which can impact performance
and need to be forecasted are:

The introduction of the Boeing 777x models into the world in 2020. This project is

collaborated with NASA in order to make models like never seen before. If this project goes
as planned, it will change the face of aircraft technology in terms of eco efficiency. Etihad
already forecasted this and therefore ordered 25 mini jumbos of Boeing 777x for the time
being.

The Arab spring promises to bring strong economic growth once these crisis are over.

The reason these crisis are going on is because the people want change in their society. At the
moment the economic situation of these countries are not very strong. Despite this Etihad
chooses to stick with them because they forecast strong economic growth after these crisis are
ended.

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d)

Environmental Assessment

This is the last step of the analysis where all the findings are collected and reviewed together,
and probabilities are calculated. The important findings from the external analysis which need
to be assessed are:

Fluctuating economic conditions of the Arab spring countries are affecting the

business, but services are still being offered. This is because there is promise of strong
economic growth once these civil crisis are over. Not all countries in MENA are facing this
problem, therefore there is some sort of balance found there. The GCC countries are well to
do, therefore current strategies in the MENA region can be based around them for the time
being in order to generate revenue and make up for loss. It already has been happening with
increased number of flights to the GCC countries

Technology and the airline industry go hand in hand. Airlines need to be

technologically updated not only for the safety and security of the passengers, but also for
reducing environment footprints and giving good competition to competitors. With the new
eco efficient models of aircrafts coming out nowadays, and future models (Boeing NASA
project) Etihad assessed this situation by buying new models for its current fleet and placing
orders for the future ones. It is really expensive considering the billions of dollars spent, but
the reduction in fuel consumption, increase in efficiency, handling, size, and low
environmental impacts makes this step justified.

43

INDUSTRY ENVIRONMENT ANALYSIS

1.

Porter's 5 forces model

Porter's five forces model is an industrial framework which is used as a tool for business
planning, development, and analysis. In the airline industry, we use this model to specifically
measure the competitive intensity to get a grasp on the actual attractiveness of a market.
Porter's five forces model takes the following factors into consideration:

Threat of new entrants

Rivalry among competing firms

Threat of substitute product

Bargaining power of customers

Bargaining power of suppliers

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Threat of new entrants

The aviation industry in the United Arab Emirates is considered to be one of the most
successful in the entire world. The huge market growth in recent years has been due to the
success of 5 of the Middle East's top airlines. They consist of The Big 3 : also known as
Emirates, Etihad airways, and Qatar airways. The other 2 are low cost airlines Fly Dubai and
Air Arabia. The strategic location of the Middle East as a potential hub that connects
passengers between the Eastern and Western hemispheres, along with also it's closeness to
Europe, makes the country an area with high potential and opportunity for those trying to
penetrate the airline industry. The industry in itself is undergoing a redevelopment plan
which will allow all 8 international airports in UAE to be able to collectively be able to serve
over 300 million passengers per year. All five of UAE's main airlines, along with other
smaller airlines are rapidly trying to increase their fleet and get ahead of the competition. The
competition is so intense between the 5 airlines that it leaves little room for companies to try
to win a market share battle with these aviation giants. Airlines have tried and failed to take
advantage of UAE's strategic location and compete in the same market as those I had
mentioned earlier. There is room in the future for more competition and new airlines to jump
in the mix, however, the competition is so intense right now that it is decreasing each rival's
revenue in order to acquire the biggest fleet despite a demand that has not skyrocketed.

There is room for the introduction of more low cost airlines in UAE's airline industry. The
recent worldwide economic problems have lead many more people to opt to fly low cost
airlines only, caring less about the frills and benefits of large commercial airlines and caring
more about the total cost and getting from destination to destination. The big 3 airlines
possess products that cater to a more high income crowd and can only be considered indirect
competition to low cost airlines.

45

Above is a chart showing Dubai airport's increase in international passengers in February

2010, from Airports Council International.

Rivalry among competing firms-

Obvious rivalries exist between airlines within UAE's airline industry, as well as with airlines
on the outside. Etihad airlines will always face still competition in every facet of business
from Emirates and Qatar airways. This is due to the similarity of the products, the
penetration of the same market, and similar visions and goals. Etihad airways competes with
Emirates and Qatar on all levels. The similarity of their resources and capabilities makes it
very difficult for one airline to get far ahead of another airline at any given time. Any
innovative breakthroughs seen by one airline will only result in the reproduction of a
product/marketing plan by its rivals in order to duplicate their ability to find innovative ways
to create value for customers.

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Low cost airlines Air Arabia and Fly Dubai are more rivals to one another than to Etihad
airways, however they are competition nonetheless. Like I stated above earlier, low cost
airlines have a good opportunity to be successful in the market with the unstable economy
and recent world economic crises.

Threat of a substitute product-

There is a high threat level in terms of other airlines that can offer substitute products. These
include the obvious 2: Emirates and Qatar, along with other world leading airlines operating
close by out of Europe. Some of these European airlines include: Luftansa, KLM, and
British Airways. These airlines all have something in common in that they are all aiming to
expand to more areas of the world because they all possess high brand value and customer
loyalty, along with strong strategic locations as an international hub. These world leading
airlines will always aim to offer the best products and services in their own right, but are also
challenging one another to keep coming up with innovative business strategies. When new
technology is available, all of these airlines are first to line up for the product, as they were
for the Airbus A380 when it was first launched. It is an approach that speaks of their
intentions, to compete on the world stage with top brands. Product similarity will always be
an issue for these companies as they have access to the best there is, therefore they are forced
to also compete heavily via their marketing strategies and tactics. Etihad airways can usually
be considered the second mover to Emirates, where Etihad will always move to copy or
counter Emirate's marketing tactics but will make sure to wait for them to make the first
move.

Bargaining power of customers

Local and global competition between airline companies is very high and continuing to
increase as more and more people gain a demand to travel via commercial aviation.
Customers have high bargaining power when it comes to airlines because of the vast number
47

of choices available. High competition between airlines globally ultimately give customers
the power to choose which airline is right for them. On a more local scale of competition,
Etihad airlines has to not only worry about Emirates and Qatar Airways, but also making their
economy class appealing to customers who opt to fly low cost airlines instead. Customers
stand not only to benefit from the financial competition that stands between these airlines but
also their individual loyalty programs, each designed to generate a sense of membership for
customers and keep them loyal to their brand. Loyalty programs are a large part of a
commercial airline's appeal in the market today.

Bargaining power of suppliers:

Etihad's suppliers are similar to those of most other airlines. This would be the two global
aviation giants, Boeing and Airbus. These suppliers dominate the world airline industry and
have all the power, as they are the ones who decide the quality and pricing of their products.
They have the option of increasing or reducing their product pricing or quality as they please
because of such a high demand for their products. This makes the bargaining power of their
suppliers much higher than that of Etihad Airways themselves, and makes Etihad very
sensitive to changes to their suppliers. One way suppliers can appeal their product to an
Airline is by choosing to deal in bulk, such as signing contracts which may result in the
purchase of many planes over a period of a few years, in exchange for a cheaper initial price
of each plane.
2.

Strategic dimensions

In order to achieve success competing on a global stage against top competition from around
the world, Etihad must strategize according to the vision and goals that have seen them
become the fastest growing full service airline in commercial aviation history. Detailed
planning of the following strategic dimensions allows for Etihad to remain competitive in the
market:

Extent of technological leadership

Product quality & Customer service

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* Pricing policies

Distribution channels

Extent of technological leadershipNowadays, advancements in technology have led to much more than just a globalized
world. Innovation through technological advances creates value and convenience for
customers of today and the future. Customer's needs and wants are changing along with the
rapid rate that trends in the world change. Customers now need much more than the feeling
of safety and security during flights, but look for more benefits that could make their journey
better for them in any way. This is where the extent of technological leadership comes in. It
is important for Etihad airways to stay on par, if not ahead of its competition through the
direct use of technology.
Over the past decade we have seen a shift in trends the tourism industry which has made
online bookings and reservations the most sought after medium of reservation, as opposed to
speaking with people directly or indirectly over a phone. The airline industry has made good
use of this technology and Etihad has also adopted more advanced technology which may
establish them as one of the leaders in aviation marketing strategies for the future.
As a world-leading airline it is always essential to have a website that can go above and
beyond just meeting a customer's demands, but exceeding them by also telling customers
exactly what they want.
A large part of what makes Etihad airways so great is the how they can create a relationship
with a customer, showing them the value of flying Etihad. One way they do this is through
their website www.etihad airways.com . Their website is made with elegance, but also
simplicity. If you are located in a country/city that Etihad airways flies to, the website will
automatically redirect the user to the home site made specifically for that city. Etihad will
automatically have a list of major cities around the world for which you can travel from your
city, along with the prices which will be converted into the local currency of your country.
Below is an example of what I saw when I accessed www.etihadairways.com from home in
Bangkok.

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Breaking deals from Bangkok

Abu Dhabi- Coral Economyfrom THB 26895
Dubai- Coral Economyfrom THB 26895
Dublin- Coral Economyfrom THB 43260
Frankfurt- Coral Economyfrom THB 38650
London- Coral Economyfrom THB 40175
Manchester- Coral Economyfrom THB 42025

Also on the home webpage of Etihad are the options of choosing flights, hotels, cars, and
chauffeurs. The page is made in a way that is very user-friendly, integrating the input and
output options of the site in a very simple, yet effective way.
Although www.etihadairways.com is Etihad Airways's official site, a
www.whyeithad.com site also exists. Upon visitation of that website, you can see that it is
even more simple, yet still elegant. A very noticeable large number is counting upwards on
the top of the page. As of right now, it says 44,131,014 guests journeys and counting. This
website was designed to answer the question why choose Etihad over other airlines?.
There are 5 different options to click on the site, showcasing Etihads products and services.
They read: Effortless Airports, Bliss, Thrills and Spills, Fresh and Organic, and Better
Dreams. Upon clicking these options, guests will be able to see what differentiates Etihad
from other airlines and why it should be their first choice carrier.

Another intriguing element to both of their websites is the experience Etihad option. This
allows guests to see and experience the environment inside the aircrafts, the limousines, the
lounges, and the coach buses; all before they even have to book anything. This is shown
through detailed videos which showcase the full functionality and features of their products.
Etihad airways truly offers world leading products and it was an intelligent move for them to
be able to integrate this into their website so that potential customers could really
experience Etihad without actually making that decision to travel. It shows that there are
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no gimmicks with Etihad, and it sends a message that the customer will have access to all the
amazing products and services they saw on the site once they choose to fly with Etihad.

Etihad airways has seen such rapid growth since its startup in 2003 that it requires
technological assistance in sustaining its growth. Etihad chose to use a pricing and revenue
management software called Big Data Startup to help efficiently manage the vast amount of
data they were generating from the large amount of flights they operate year round. This tool
helps Etihad convert data into trends, suggesting new destinations that fit their target market
group, while also suggesting the best seat/price combinations. Big Data gives Etihad an edge
over other airlines with its ability to generate results.
Safety and reliability are keys to success in the commercial airline business. Etihad reached
new heights in innovation when they introduced new technology which helps to predict
aircraft maintenance faults and reduce flight delays. This technology, made by global
technology company Taleris, is designed to increase the operational efficiency of Etihad's
fleet. It is expected to deliver significant financial savings for Etihad Airways and improved
reliability for passengers and freight customers as the technology continuously analyses data
from multiple sensors on aircraft components and systems, and warns of imminent problems.
The expected benefits include a reduction of unscheduled maintenance, fewer delays and
cancellations, increased aircraft availability, enhanced on-time performance, and increased
maintenance efficiency, reduction in maintenance costs and reduction in lost revenue costs.
The service also can reduce the requirement to store expensive spare parts, which are
typically stocked in case of a malfunction.

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Product quality & Customer Service

Etihad airways is considered by many to be one of the best, if not the best, when it comes to
the products they offer and the quality of service they provide. It easy to see why.
Chauffeur service- Etihad airways offers a complementary Chauffeur service in 25 cities
worldwide, including Bangkok, for all of their guests flying Diamond First Class or Pearl
Business Class. This means that Etihad has luxury cars in 25 major cities around the world
and special chauffeurs whom are at your service upon your landing, without extra charge.
Etihad really captures the word outstanding by taking care of its passengers both in the
air and on the ground. Etihad tries to maintain its high quality service for guests
everywhere. In your personal limo service, you are able to find amenities such as
complementary mineral water and a copy of the most current newspaper to keep you updated
in a busy world. Etihad goes as far as using unbranded vehicles so that their guests can truly
travel safely and discreetly without concerns.
Lounges- Below is a list of the First and Business class lounges that Etihad airways offers its
customers worldwide, including the cities they are located in:

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Cities Lounge Names

Almaty

Almaty Airport Lounge

Amman

Crown Lounge

Athens

Swiss Lounge

Bahrain

Delmon Lounge

Bangalore

Oberoi Lounge

Bangkok

Royal Orchid Lounge

Beijing

Air China Lounge

Beirut

MEA Lounge

Brisbane

Air New Zealand Lounge

Brussels

Brussels Airlines Business Lounge

Cairo EAS Lounge and Airport Authority Lounge

Calicut

Malaba Palace

Capetown

Bidair Premier Lounge

Casablanca Atlas Lounge/Royal Air Maroc

Chennai

Oberoi Lounge

Chicago

JAL Lounge

Cochin

Oberoi Lounge

Colombo

Araliya Lounge

Damascus

Executive Lounge

Dammam

First Class Lounge

Dhaka

Sheraton Lounge

Doha Oryx Lounge

Dublin

Etihad Airways First & Business Class Lounge

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 Frankfurt

Etihad Airways First & Business Class Lounge

Geneva

Horizon Lounge

Hyderabad

Plaza Premium Lounge

Islamabad

CIP Lounge

Istanbul

Prime Class Lounge

Jakarta

Purah Indah Lounge, Premier Lounge or Emerald Lounge

Jeddah

First Class Lounge

Johannesburg

Ongololo Lounge

Karachi

CIP Lounge

Katmandu

Executive Lounge

Khartoum

First Lounge

Kuala Lumpur

Malaysian Airlines Golden Lounge

Kuwait

Pearl Business Lounge

Lahore

CIP Lounge

Larnaca

Swiss Lounge

London Heathrow

Etihad Airways First & Pearl Business Class Lounge

Manchester Etihad Airways First & Pearl Business Class Lounge

Manila

PAGS STOP Lounge

Melbourne

Air New Zealand Lounge

MilanSEA Club Lounge

Minsk

National Airport Lounge

Moscow

Domodedovo Airport Lounge

Mumbai

Oberoi Lounge

Munich

Atlantic Lounge

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 Muscat

Plaza Premium Lounge

Nagoya

ANA Star Alliance Lounge

New Delhi

ITC Sheraton Lounge

New York

The Lounge

Paris American Airlines Admirals Club Lounge

Peshawar

CAA Executive Lounge

Riyadh

Attar First Class Lounge

Seoul Asiana Lounge

Singapore

SATS Premier Club

Sydney

Air New Zealand Lounge

Tehran

CIP Lounge

ThiruvananthapuramMuthoot Plaza Lounge

Tokyo

ANA Premium Lounge

Toronto

Plaza Premium Lounge

With first and business class lounges in over 60 major cities worldwide, Etihad is able to
provide outstanding pre-flight products and services across the globe.
Etihad airways takes their products and services to another level, and that is evident when
introducing what products and services are provided in these lounges.
Etihad's most famous lounges are located in Abu Dhabi, the capital city of the UAE. Both the
business and first class lounges located in Abu Dhabi stand out in their own way.
Business Class Lounge- The Pearl Business class lounge offers customers the complete
package, whether you are looking to dine in a 5 star setting that reflects the high quality of its
air service, or if the customer wants to relax and enjoy various 15 minute spa treatments,
ranging from facials, feet detoxification, and scalp massages. Guests are provided with stateof-the-art facilities that include: bathrooms with showers, ironing and shoe polishing service,

55

a family/children's room, free wifi and use of the newest of Apple's iMacs, and access to
pretty much anything you would need to feel comfortable and refreshed before your flight.

First Class Lounge- The Diamond First class lounge offers all of the above privileges of the
Pearl Business Class lounge, and more. What makes this unique to most other airport
lounges is that the Diamond first class lounge offers products and services that go beyond
your expectations, rivaling 5 star hotels and restaurants. The Diamond first class lounge
offers a la carte dining, a choice from a wide variety of dishes using fresh and imported
ingredients served in a 5 star setting. They even go as far as providing wine that can be
paired with your food, selected by professional sommeliers. Nothing says class like a
Champage Room and Cigar Lounge, and that is exactly what Etihad offers in their
Diamond First class lounge. Guests are able to indulge themselves in Champagne vintages
such as the Brut Blanc de Blancs 2002, the Billecart-Salmon, or a choice of fine red or white
wines. If you are a guest with a taste for Cigars, Etihad has some of the best selections to
offer; whether it be American, or the more traditional Cuban. Pair a fine cigar of your choice
with a drink such as Champagne, wine, Cognac, or Armangnac.

Customers leave the

Diamond First class lounge feeling as if they have just left a 5 star hotel or restaurant, not an
airport.

On Board- Of course, Etihad cannot be an elite airline without being one of the best in terms
of what they can offer their customers on board each aircraft.

Coral Economy- From the description of Etihad's airport lounges, it is easy to see Etihad's
Diamond First class and Pearl Business class guests are treated much like royalty, however,
that does not mean that their Coral Economy class passengers will be left out.

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Guests flying Coral Economy class have access to the same consistently excellent services
that the Etihad brand represents. Economy class guests are able to choose from a choice of 3
different meal options on board, as opposed to other full service airlines that offer a choice of
2 dining options. Hot/cold drinks are available in a cafe style, while hot desserts are available
to all guests. The dedication to providing excellent inflight catering has paid off, as Etihad
won the Skytrax award for Best In-Flight Catering back in 2007.

Each guest will receive an on board travel pack, filled with comfort items to make overnight
flights as comfortable as possible. In most economy class cabins, what is usually most
complaint about is the service, the seat space, and the lack of angle of seat recline. On Etihad
airways, this is not a problem. The seats are ergonomically designed to provide both comfort
and relaxation. The cradle recline function allows guests to sit in a more natural position
than they would find on most other airline economy classes, also allowing a seat pitch of
between 32-34 inches. Adjustable integrated head and foot rests are also provided to ensure
the passenger will be able to achieve his/her desired level of in-flight comfort.

Etihad has a very user friendly and well integrated entertainment system for each Coral
Economy guest, also providing what they claim to be the largest individual touchscreens for
any economy class cabin in the entire airline industry (10.4 inches). Over 600 hours of ondemand entertainment such as music, movies, tv series, and interactive games is available for
guests to browse and select something that will keep them entertained.
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All Coral Economy class seats on Etihad airways provides guests with in-seat electrical
sockets, as well as Ethernet and audio sockets. Electrical sockets are absent from many
world class airlines completely when many customers view them as a necessity, as charging a
Laptop or Ipod/Iphone on board is a must for many passengers.

Even the lighting in Etihad's Coral Economy class is brilliant, differentiating from most other
airlines. Instead of having the option of having white lights which can be turned on and off,
Etihad provides Economy class mood lighting which creates an ambience that will keep
customers relaxed throughout the flight.

Pearl Business Class- Etihad's business class seats have all of the useful functions of the
Coral Economy class, and much more. The following specifications are used for Etihad's
narrow-bodied aircrafts, the A319 and A320s. Having a seating arrangement of 2 seats next
to each other instead of 3, the Pearl Business Class offers customers more space at their seat
and for the aisle. The seat pitch for Pearl Business Class seats is 49 inches. The
entertainment experience is also different when flying Pearl Business Class, offering guests a
slightly larger 10.6 inch personal LCD TV. What really stands out as the big difference
between Pearl Business and Coral Economy class are the dining options. Pearl Business
class offers an extensive a la carte menu that will have customers choosing what they prefer,
rather than what they would have between 2 or 3 items. Besides eating at designated
mealtimes, Pearl Business class passengers are also allowed to order meals at any time,
choosing from their Anytime Kitchen Menu, so that your hunger can be satisfied at any
given time upon your request. Etihad has a Food and Beverage Manager aboard every flight,
making sure their customers find the dishes and accompaniments best suited to what they are
looking for. Like previously stated, Pearl Business class passengers are provided with
excellent services before, during, and after their flights. They are allowed access to premium
business class lounges worldwide, and also have the option of booking chauffeurs in major
cities around the world for their post flight comfort and convenience.

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* On Etihad's wider aircrafts: the A340-500, A340-600, A330-200 and B777-300ER planes,
Pearl Business Class offers an even more elegant seating option with even better functions.
The noticeable differences to their other Pearl Business class seats are: The larger 15 inch
personal screen, the built-in massage functions and controls of the chair, the larger personal
space, and the full 180 degree reclining option, turning your seat into a full flat bed.

Diamond First Class- Etihad airways currently has 2 different seating arrangements for their
aircrafts but are currently rolling out the Diamond First Class Suite arrangement across
their fleet. The suite will be the focal point of the First Class experience.

While Pearl Business class offers their customers more than the necessities to fly, Diamond
First Class does a marvelous job in generating an environment which could rival some of the
best service providers on the ground. Their product is perhaps second to none.

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Customers choose Etihad Airways First Class Suites because what first stands out, at a
glance, is the privacy. Guests are each given their own private cabin with sliding screen
doors, giving them a sense of much desired in-flight personal space and privacy. The TV
screens are a whopping 23 inches. There is even a dining option for 2, as each personal cabin
can accommodate a meal for 2, in the case you would like to eat across from someone you
are traveling with. Guests have a personal wardrobe space at the side of their cabins where
they have the luxury of storing any clothing they may want to change into later on. Another
amazing feature in this dream cabin experience is the personal mini-bar. Each cabin has its
own personal mini-bar which is equipped with drinks so that guests are not troubled with
having to ask the air hostess for simple drinks such as mineral water.

Luxury coaches For guests of Etihad whom are residents of/traveling in Dubai, luxury
coach buses are available to comfortably transport them from Dubai to the airport in Abu
Dhabi without any prior booking required. Check in and luggage drop-off is also available in
Dubai, allowing guests to avoid the hassle of carrying baggage to Abu Dhabi around or
having to wait until they arrive at the airport to check-in.

It has become quite obvious that Etihad's products are of world class quality. From the
airplane interior designs to the option of using luxury coaches or using one of their many first

60

and business class lounges worldwide, excellence in quality is consistently spotted in Etihad
Airway's products.
*Pricing PoliciesDistribution channelsAs Etihad is always looking to expand its fleet and its travel destinations, it also has to have
distribution channels that effectively attract their target market.

Etihad has been using a Global Distribution System called Sabre Airline Solutions since
2011. It provides a GDS-connected travel agencies access to Etihad's flight and schedule
information. Sabre now provides: reservations, inventory, marketing, planning, e-commerce,
distribution and departure control operations," according to the airline. It provides a
standardized and more manageable option for an airline that is trying to expand globally. It
was considered the single largest technology enabled business change that Etihad will
undertake in the last decade

Etihad/Virgin Australia- Etihad reached a mutual agreement with Virgin airlines (Australian
based) back in 2010, expanding their global network to 44 new destinations in Asia,
Australia, New Zealand, Los Angeles, and the Pacific Islands. By forming partnerships such
as this, Etihad excels in expanding their global network to reach as many potential customers
as possible. They are world leading in terms of products and services, and always look to
bring those world famous qualities to as many passengers as possible.

Partner airlines- Etihad Airways has a codeshare agreement with 40 different airlines around
the world. A codeshare agreement allows Etihad to have their passengers share flights with
these 40 different airlines, and vice versa. The codeshare agreement includes the following
airlines:

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Aer Lingus
Aer Lingus Regional
Air Astana
Air Berlin
Air France
Air Malta
Air New Zealand
Air Seychelles
Alitalia
All Nippon Airways
American Airlines
Asiana Airlines
Bangkok Airways

Brussels Airlines

China Eastern Airlines

Cyprus Airways
Czech Airlines
Flybe
Garuda Indonesia
Hainan Airlines
Jet Airways
Kenya Airways
KLM
Kuwait Airways
Malaysia Airlines

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Middle East Airlines

Nas Air

Niki

Olympic Air
RAK Airways
Philippine Airlines
Royal Air Maroc
S7 Airlines
Saudia
Safi Airways
SriLankan Airlines
TAP Portugal
Turkish Airlines
Vietnam Airlines
Virgin Australia

Not only does codesharing attract more customers and expand Etihad's network, it is an
extremely beneficial trend that is common amongst major airline alliances. It provides
benefits for both the passengers and airlines.

Passengers benefit from codeshare flights in 2 main ways. Firstly, it becomes more
convenient for passengers to book and travel from point A to C through one carrier's code, as
opposed to booking from point A to B under one code, and from point B to C under another.
Codeshare agreements usually mean that different airlines within the agreement will alter
their flight schedules to synchronize with one another, making luggage handling and transfers
between connecting flights quicker and more dependable. The second way passengers
benefit from codeshare agreements is because the airlines under the agreement will be
mutually responsible for problems regarding connecting flights. For example, if 2 non63

codeshared connecting flights were booked and the first caused a delay, the connecting flight
would not be liable to the passenger if he/she/the baggage, were to miss the connecting flight.
For codeshared flights, the connecting airline would do what they can to be accommodating
for delays, such as not charge extra fees and allow late passengers on board. Overall, they
would take better care of their passengers as a direct result of airlines working together.

For the airlines involved in the codeshare, various benefits exists. Firstly, if 2 airlines flew
the same routes, there would be an increase in the frequency of flights on that route, giving
potential passengers more options of when to fly. Secondly, codeshare agreements provide
exposure for many airlines in markets where they do not normally operate. For Etihad, who
operate worldwide, it is a way to imprint their brand in as many potential customers around
the world as possible. Lastly, when airlines involved in codeshare agreements sacrifice some
of their capacity to other airlines, they will have no operational cost. This ensures that the
airlines involved will usually have a high cabin factor percentage.
Etihad has chosen to call their tour offices worldwide Holiday shops and place them in
strategic buildings or locations to try to give potential costumers value to their product. Their
choice of venue happens to be shopping malls in countries all over the world. Etihad airways
likes to set up offices in high end shopping mall, such as the Balwadi mall in Al Ain and
Dubai. This is a strategy that works because it promotes the purchase of a holiday
ticket/package to someone, as opposed to them buying luxury items in the mall.
As I mentioned earlier, the website is a key attractive feature for Etihad and also plays an
important role as a distribution channel. It provides relevant and useful information to
curious customers while also bringing the easy of combining different types of booking
packages in different cities. This includes hotels, chauffeurs, flights, etc.
Etihad Airways has tour offices in countries all over the world, mostly more developed
countries. This is necessary for them as a global brand to try to attract as many customers
from as many destinations as possible. Etihad has over 12 offices in the Abu Dhabi region
alone and this is another aggressive strategy to attract Middle Eastern customers from older
and more chronologically established airlines such as Emirates and Qatar airways.

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COMPETITOR ANALYSIS
As part of the famous Big 3 full service commercial airlines of the Middle East, we chose
to compare and contrast between Etihad Airways, Emirates, and Qatar Airways

Backgound, vision, mission, objectives, value statements, culture of 2 competitors

Current strategy, capabilities and analysis of both competitors

Etihad Airways
Background :
Etihad Airways is the flag carrier airline of the United Arab Emirates. Established by Royal
decree in July 2003 and based in Abu Dhabi, Etihad commenced operations in November
2003.The name derives from the Arabic word for "union" The airline operates more than
1,000 flights per week to 96 passenger and cargo destinations in the Middle East, Africa,
Europe, Asia, Australia and the Americas, with a fleet of 85 Airbus and Boeing aircraft. In
2012, Etihad carried 10.3 million passengers, a 23% increase on the previous year, delivering
revenues of US$ 4.8 billion and net profits of US$ 42 million.Etihad Airways is the fourth
largest airline in the Middle East and it is the second largest airline in the United Arab
Emirates, after the Dubai-based airline Emirates.
In addition to its core activity of passenger transportation, Etihad also operates Etihad
Holidays and Etihad Cargo.The airline is based at Abu Dhabi International Airportand its
head office is in Khalifa City A, Abu Dhabi.
Emirates
Background:
Emirates is an airline based in Dubai, United Arab Emirates. The airline is a subsidiary of
The Emirates Group, which is wholly owned by the government of Dubai's Investment
Corporation of Dubai. It is the largest airline in the Middle East, operating nearly 3,400
flights per week from its hub at Dubai International Airport, to more than 150 cities in 74
countries across six continents. Cargo activities are undertaken by the Emirates Group's
Emirates SkyCargo division. The airline ranks among the top 10 carriers worldwide in terms
of passenger kilometers, and has become the largest airline in the Middle East in terms of
revenue, fleet size, and passengers carried as of 2007. In 2012 the airline was the fourthlargest airline in the world in terms of international passengers carried and scheduled
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passenger-kilometers flown. The airline was the third-largest in terms of scheduled freight
tonne-kilometres flown. The company also operates four of the world's longest non-stop
commercial flights from Dubai to Los Angeles, San Francisco, Dallas/Fort Worth, and
Houston.
Qatar Airways
Background:
Qatar Airways is the state-owned flag carrier of Qatar. Headquartered in the Qatar Airways
Tower in Doha, the airline operates a hub-and-spoke network, linking over 100 international
destinations across Africa, Central Asia, Europe, Far East, South Asia, Middle East, North
America, South America and Oceania from its base in Doha, using a fleet of more than 100
aircraft.
The airline has more than 30,000 staff, with 17,000 people employed directly and a further
13,000 in its subsidiaries. On October 8, 2012, CEO Akbar Al Baker announced that Qatar
Airways would join the Oneworld alliance. The carrier became a full member just one year
later on October 30, 2013.
Analysis:
After looking at the similarities and differences between the 3 airlines, we can see that they
have many similarities. This is due to the fact that the 3 airlines operate in the same general
area of the world and are in the same market as one another. All 3 look to innovate and be
more creative but it is difficult when the competition is so strong. Looking at the company
vision, Etihad's stands out from the other 2 airlines. All 3 have visions and missions that
speak in terms of operating at an extremely high level but Etihad's is the only one that
involves the term culture and using it as a tool in providing hospitality and getting the
customers to become more familiar with warm culture that is reminiscent of UAE. This is a
strategy I have found to work well in the hotel industry. By adopting values from a flagship
airline's host country, it provides the customer with a special experience. As an airline that
has a very large network and operates worldwide, Etihad was intelligent in using this as their
vision as it exposes customers whom may not be flying to/from UAE to a culture and quality
that may want them to consider going one day. It is also a tool to attract people to fly with
them but to spend time in their country.

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With regards to the objectives, there was only information on Emirates and Qatar Airways.
They differ in that Emirate's objectives are clearer cut, whereas Qatar's is more general. I
would consider Emirates to currently be the most successful airline of the 3 so it is without
surprise that they have more specific objectives. One of their objectives is Increase market
share 40% to 55% by the end of 2014. This is a statement of measurable goals that the
company plans to accomplish before the end of the year. Emirates chooses to look at the
numbers when measuring success as they can be solid indicators that can be compared with
pieces of data from years past and present.
Etihad's value statements are all closely related to having good values as a human being. To
not only go beyond in terms of service, but to be the best human being you can be awhile on
the job.

The 3 airlines use 3 different strategies currently, and change strategies often to adapt to the
market in relation to the competition. Etihad airways is looking to develop technology before
their competitors, which can give them exclusive access to products their competitors won't
have for some time. Etihad has expanded quickly and aggressively since its initial foundation
and their current strategy fits in well as it prepares to do even bigger things in the future. The
current strategy of Emirates is looking at their employees as their greatest assets. They
believe in training their employees extensively so that there is a large amount of talented
employees who are ready to meet the demands of the expanding airline. Building strong
employees eventually leads to a better image because of the consistency of good quality that
comes through. Qatar airways focuses on using innovation and creativity as the key
ingredient behind all aspects of the job. Qatar understands the importance to get ahead but
will remain in the same tier of competitors with the other 2 airlines due to its location and
market similarity.

One main difference between the airlines that was not on the chart above is that Etihad and
Emirates are both part of codeshares/partnerships but not part of any large global airline
alliance, while Qatar airways had recently joined Oneworld, a world leading aviation Alliance
Company. Etihad and Emirates are able to operate more independently and with their own
rules as a result of this difference, while also enjoying the benefits of expanding their route

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network through other airline companies. Qatar airways enjoys the benefits of a being in a
reputable alliance that shares benefits, however, are confined to operate within their rules.

INTERNAL ENVIRONMENT
Resources
Resource is one of the main components to set up a business. It is an input into a firms
production process, from start till the end, therefore it is very importance. A company can
enable themselves to become successful if they can develop an excellent resource research
and.
Etihad Airways, the national airline of the United Arab Emirates, has established itself as
worlds leading airline for eight years. This airline has received a range of awards that reflect
its position as leading premium airline brand in the world, including Worlds Leading
Airline at the World Travel Awards in 2009, 2010 and 2011. Its main business is the
international air transportation of passengers. Etihad Airways also operates Etihad Holidays,
Etihad C
There are two types of resources:A.

Tangible resources

These resources in the company are assets that can be touch, see, and quantify. They are any
of the companys property that has a physical existence.

Financial resources

Financial resource is the money available to a business for spending in the form of cash,
liquid securities or credit lines. A company needs a to secure sufficient financial resources
first to be able to begin and operate efficiently and sufficiently, as to reach the goal of
success. Etihad though dont have any financial resources as it is a private company and run
by the government. They do not sell stocks.

Organizational resources

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James Hogan - President and Chief Executive Officer

James Hogan is the President and Chief Executive of Etihad Airways since 10 September
2006. Working over more than 30 years in travel industry expertise to the Abu Dhabi-based
airline. He see an opportunity in the rapid growth of the UAEs national airline, which was
serving 87 passenger and cargo destinations in the Middle East, Africa, Europe, Asia,
Australia and North America while also operating 66 modern environmentally friendly
aircraft).
In July 2008, he signed one of the largest aircraft orders in history for up to 205 aircraft
worth approximately US$43 billion at list prices, to meet the airlines ambitious long-term
growth plans. CEO Magazine named him Aviation CEO of the Year in 2008 and Visionary of
the Year in 2010. James started his career in 1975 at Ansett Airlines, and subsequently held
senior positions with BMI, Hertz, Forte Hotels and Gulf Air. At Hertz, his roles included
directorships of the marketing, sales and operations divisions. In 1995, based in London, he
joined the executive management committee as Vice President, Marketing & Sales for
Europe, Middle East and Africa. In 1997, James became service director for BMI British
Midland, leaving in 1998 to join the Granada Group as worldwide sales director, where he sat
on the board of Forte Hotels. He returned to BMI in 1999 as chief operating officer. There he
was responsible for flight and ground operations, sales and marketing, commercial, cargo,
engineering and handling service companies, and was a member of the Board.
James moved back to his native Australia in 2001, where he was appointed chief executive of
the Tesna consortium, which was created with the aim of acquiring Ansett Airlines from

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administration, before joining Gulf Air in 2002, where he served as chief executive for four
years.
James is a fellow of the Royal Aeronautical Society and a former non-executive director, and
member of the Boards Audit Committee, of Gallaher Plc. In 2010, he served as the chairman
of the Aviation Travel and Tourism Governors at the World Economic Forum.
He currently serves as vice chairman on the Executive Committee of the World Travel and
Tourism Council (WTTC) and the International Air Transport Association (IATA) Board of
Governors. Following the acquisition of a majority shareholding in Air Berlin plc, in
December 2011, he was named as vice chairman of the airline.

Physical resources

Etihad Airway currently holds about 5% of Virgin Australia Holdings, while the Australian
government has confirmed its decision to let Etihad Airways increase its equity in Australia
Virgin about 10%.
This increase was made possible by the partnership forged 2010 with the Australia
administration on a ten-year strategic partnership to provide provisions for code sharing, on
flight controls of their prospective frequent flyer programs and joint marketing initiatives.
As a result Virgin Australia and Etihad Airways operated 24 flights a week between divide
and Australia. In addition Etihad operate on all domestic Australian flights giving passenger
access to about 3000 flights per week domestically.
Below are Highlights of the Etihad airways join ventures with other companies.

Hala travel management is a joint venture between Etihad airway and the BCD

travels, it's purpose is to provide travel management services for the Abu Dhabi government
and its clients.

Aldar Etihad Investment Properties LLC is the result of a joint venture effort between

Abu Dhabi's biggest real estate developer and at the Etihad airways. This joint venture
created the Abraj Tower in Abu Dhabi and it also ineffectively created housing for recreation
facilities, utility and services for its surrounding communities.
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Armaguard Valuables Management LLC is a joint venture between Etihad Airways

(51 per cent) and the Linfox Group (49 per cent). Is a company that provides transportation
for valuable goods around the globe and it has been in operation since the latter half of 2012.

Amadeus Gulf LLC is a subsidiary of Etihad Airways, owned jointly by Etihad

Airways (51 per cent) and by the Amadeus IT Group S.A. (49 per cent). This subsidiary of
the airline acts distributors globally with its partners in the travel and tourism industry. It
represents the United Arab Emirates, the kingdom of Bahrain and the Sultanate of Oman.
The airline currently serves 86 destinations in 56 countries. Furthermore it currently has four
global contact centres employing over 500 people globally in 11 languages.

Technological resources

Currently the airline is one of the biggest education and skill-training provider in UAE for
students who are seeking career opportunities in the aviation industry. This development is
highlighted by a Memorandum of Understanding with the Higher Colleges of Technology
(HCT). HCT students are required to attain courses in aviation engineering and thereafter
Etihad often provide workplace after their trainings. Specialist seminars and workshops in
every area of the aviation industry are offered by HCT to its students. HH Sheikh Nahyan bin
Mubarak Al Nahyan, Higher Education and Scientific Research Minister and Chancellor of
the HCT, said: This new agreement will play an important part in the development of the
national workforce in the field of aviation. Etihad Airways has established itself as a leading
global company and the partnership with the HCT will be mutually beneficial to both
organisations and in the long term the UAE as a whole. (Etihad Airways Facts and Figures,
2009)
B.

Intangible resources

The assets you cannot touch or see but that have value. It is an asset that is rooted in the
firm's history created over a period of time. As one of the biggest airline in the region and
around the world at the hat has its intangible resource in firstly it's reputation, and secondly
its massive global network. Its unrivalled dominance domestically provide UAE with jobs
as well as skilled specialists in a globally competitive market.

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Human resources

The airlines perseverance in improving human resources has resulted in, Etihad Airways first
group graduate managers that have successfully completed the airlines graduate management
development program. These 12 graduates have started their program in October 2007 and
have now taken up positions in the Etihad at network group across the globe.
HaithamSubaihi, a 24 years old and from Abu Dhabi, has the role of business development
manager in New York. He said: The graduate management development programme proved
highly challenging but we are delighted to have completed our training and I now look
forward to flying the flag for Etihad in the USA. The GMDP is one of at the has outstanding
management training programs that involves a combination of classroom training and on-site
experience. The program delivers its trainees with business related trainings and
internationally qualified accreditations, which is underlined by National Vocational
Qualifications (NVQ).
In addition, the Etihads Emiratisationprogramme recently reached a milestone of training
150 UAE national trainees, and who are currently working for the airline. This program now
boast 87 cadre pilot and 34 graduate met managers along with 29 technical engineers. Since
the program began in 2007 it's trainees and graduates has become one of the most respected
and credited in the industry. Pilots and engineerings graduated from this training program are
now deployed across all positions in the airline. Most importantly these program provide all
staff and members with the necessary knowledge skill and competency to operate and a high
standard airline environment with high standard output, further insuring the long-term quality
and constantly improving nature of the airline.
(Etihad Airways Facts and Figures, 2009)

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Innovation resources

Progress and improvement is a part of Etihads core philosophy. In the last quarter the airline
has seen a number of significant improvement in development of his product sponsorship and
global network developments. While the global trend and energy prices continue to pose
challenges for the aviation industry, in the Middle East this airline continues to defy the
global trend and grow significantly year after year. Anthony has Courtvue on progress and
development is one of the main reason why the company has sustained a strategy of
measured uncontrolled growth.
Through continued investment in its capital and its workforce the airline and its carriers
continues to demonstrate confidence in growth. Following its record-breaking aircraft order
the an Air show in 2008 Etihad Airways placed 40 $14 billion order on 469 injuries including
maintenance complex. The airline recently also unveiled Im on you state-of-the-art first and
business-class cabins which once more defined the global standard for top-class aviation
services. Laying the foundation for the future the airline has put its investment in product
innovation, establishing itself as the undisputed market leader in a recovering global market.
Since its establishment five years ago, Etihad has successfully inserted itself as a globally
recognizable brand. As of May last year, the airline signed its biggest sponsorship deal with
of one the biggest football club in the English top flight, Manchester City. In addition to the
use of the Etihad logo and branding at the City of Manchester stadium, the deal will see the
airline and club work together on several projects including tours to Abu Dhabi and
community-based schemes for youngsters. And as the football season is underway,
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excitement is building as Abu Dhabi accelerates towards the capitals inaugural Formula 1
Etihad Airways Abu Dhabi Grand Prix on November 1.Reputational resource.
Sporting sponsorships along with other commercial expansions show at the house from
commitment to expanding its innovative resources.
Such improvements are exemplified in Etihads new business-class. All business-class guess
will be treated with an all new chef inspired signature bread, latte glassware and salt and
pepper grinders all served on luxury table mat. Its commitment in the business class is to
show its commitment for continued high-level luxury service on flight.
Specifically it include the following:

New signature bread Im bored and inspired by the slides own chef recipe including

mushroom-filled bread, cranberry breakfast bread and also out sort of innovative and highquality pastries.

Calling their services start right after the flight.

Introducing the second meal course 90 minute before landing of any long-haul flights

and ultra long-haul flights.

A wide selection of cheeses from different countries on ceramic cheeseboard

To maximize the customers opportunity to sleep the flight include early morning a la

minute and light breakfast also expressed supper for light meals in the evening.
In addition to all the improvement in culinary servings, the guest service product and service
standard team has launched a new mock-up training program to display the latest
improvements. This mock-up allows the cabin crew to experience and familiarize themselves
with the new necessities and improvements of the program to ensure effective
implementation of these changes on board.
During these mark-up sessions cabin crew are offered to guy at four in the new business-class
showing the equipments, galley loading plans and the new standard procedures after landing.
As a result of these efforts to improve the services on the airline it has been rewarded with an
array of prestigious awards across the world.
2012 World Travel Awards Middle East:

Middle Easts Leading Airline

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Leading Airline First Class

Leading Airline In-Flight Entertainment

Leading Cabin Staff

2012 Business Traveller Middle East Awards:

Airline with the Best Economy Class

Airline with the Best Cabin Crew

2012 Skytrax World Airline Awards

Best First Class

Best First Class Seats

Best First Class Catering

Capabilities
At the core, the ability for a airline to grow and compete with its competitors lies in its
resources and capabilities to rise above the other airlines. Improvement and being superior to
its competitors is very important to the airline because competitors would simply replicate the
current standard procedure of the firm and advantages will quickly disappear.
Etihads Capabilities:
How capable of firm lies in its ability to distribute resource effectively and utilize it to the
best way possible. The most common method of doing this is to have the ability to bring a
new product to the market faster than its competitors. It has become a product of complex
interactions between tangible and intangible resource overtime and effective human
management. The airline capability lies in its ability to constantly improve in its unique value
and its goods and services overtime.
The key in doing so is to bring out the capabilities from instant employer and their ideas to
the employee, which include:

Unique skills and knowledge

Functional expertise
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Distribution
The airline has over the years build a strong system that can provide its customers with their
desired service the pay for. Such services include on SCI Systems such as online information
system through the website, and office, as well as backstage system such as booking and
scheduling system.
Etihad puts great effort in producing products with awareness to the customers needs as well
as graphical markers of each market. Which is to in turn comply with different
advertisements, loyalty programs as well as sponsorships.
Media advertisement:
In the age of digital advertisement the airline has realized the importance of digital marketing
as well as online services in a changing global era. The airlines marketing development
department has adopted an innovative digital marketing strategy, which by developing an
integrated website. These Digital Avenues allow the traveler to do many things including
booking checking flights as well as staying in touch with the company. Specifically services
provided online allow customers to book online, advanced seating selections, meal selection,
online check in pririo to the flights and online flight status, in addition to interactive toward
through the company facilities.
The ease of use of the website gained the creditability to win the best airline website award
in 2010 (Etihad Airways 2011).
Furthermore, the website takes account of the customers loyalty programme (which will be
discussed later), where customers can join programs and redeem points earned, such as free
flights, holiday packages and upgrading travel class, online. Tehmton Cooper head of Etihad
Airways e-Commerce said Etihadcontinue to add new features to its website aimed at
improving the customer online experience, as a direct result we have seen an impressive
growth in online sales (Etihad Airways 2011). In addition, Etihad has launched in 2010 a TV
advertisement campaign, named He likes, She likes, showing the airline innovation in
developing the products and services, as well as more commitment to ensure an unforgettable
experience by travellers(Etihad Factsheet 2011). Etihads marketing strategy also takes into
account the social media such as Facebbook, Twitter and Myspace.

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Sponsorships:
Sponsoring specific sports event as well as sports organization gives the airline great global
exposure and to potential customers. Sponsoring program of the airline can be found across
the globe such as that at the high Stadium in Melbourne Australia, the international
championship Formula One Grand Prix text in Abu Dhabi and Ferrari F1 team. Etihad is also
the major sponsor of sport Australian hall of fame, GAA Hurling Ireland senior
championship, as well as Harlequins Rugby football club and Manchester city football club.
These sports events are followed by millions of fans across the world and generate immense
global coverage. Consistent with company values of hospitality and team spirit, which help
to bring Abu Dhabi to the world and the world to Abu Dhabi (Etihad Factsheet 2011).
In addition to sports sponsorships the airline is also a major sponsorship for Abu Dhabis
tourism industry. As Adu Dhabi is one of middle easts most popular tourist destinations
visitors are encouraged by Abu Dhabi tourism authority to experience reasonable prices
hotels, tour operators and sports event tickets. All of which can be found and processed
through the airlines website.

Loyalty programs
In terms of creating a loyal idea of the brand, the airline is focused on a marketing scheme
that create long-term satisfaction on the part of the customer, and exchanging the value
between the customer and the company. In addition to, increasing the customer relationship
management (CRM) interaction with the customer, this will create some kind of customers
belonging to the brand. Therefore, accumulating guest miles points offered from over than
1800 flights and varieties of 200 non-flights partners rewards (Etihad Factsheet 2011).
Program such as this allows the company to collect customers information week regularly
for free and keep track of what the customer really need. In addition it allows the company to
keep track of demographic changes and traveling patterns through the customers feedback
and supporting statistics. This will help the CRM intelligence unit to personalise offers
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targeted at some loyal customers. Nonetheless, the company has launched an Apple iPhone
loyalty programme application for its members, which offers real-time points redemption, as
well as part of its digital marketing which will promote for services and information via
mobile devices (Business traveller 2010). Accordingly, Etihad loyalty programme played a
major role in the companys growth by being more customer-centric, giving Etihad in-depth
understanding of customers needs and values, This programme has helped Etihad realign
the marketing strategy around the brand, avoid undifferentiated superiority, and be
inspirational to the individual customer (Pepper & Roger Group 2010).
Human resources

Human resources and its Ability plays a vital role in strategic implementations of a company
and it is becoming more actively involved in strategic management processes. Particularly, in
the hospitality industries where staff and their quality defines the quality of the company. The
airline knows that this Ability will bring them new ideas generating new development
through internal resources from its people.
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The airway currently employs over 9800 staff from 126 nationalities. Out of which 1181 of
fool are based in the headquarters in Abu Dhabi. Having a diverse workforce is the airlines
most important asset and their well-being is highly regarded by the company because their
success and growth and sustainability equals to that of the company. In addition the airline
offers its staff a competitive and rewarding compensation program which shows its effort to
continually invest in its people
In local communities across the airlines network, it continues to invest in that ability of its
local workforce and take a meaningful economic role in their communities. This development
fully illustrates that the home base of the company is in Abu Dhabi but it is international
organization that values in local talents. Furthermore, the airline offers a ray of skill training
and development initiatives to both improve its workforces business skill as well as acoustic
talent in all disciplines.
As a result of having a diverse workforce the airline see it as a priority to connect people and
support project that initiate long-term development and cultural awareness and
understanding.
As one of the main drivers of tourism, the airline plays a critical role in promoting its host
countrys culture and heritage. Oxford Economics has calculated that when all of these
factors are combined, Etihad Airways made a total economic contribution of nearly US$7
billion (9.6 per cent) to Abu Dhabis non-oil GDP in 2011.

Omani nationals join Graduate Management Program

11 graduate managers have recently commenced their training at the headquarters in Abu
Dhabi as a part of the airlines extensive recruitment drive in Oman.
The 20 one-month graduate program development is designed to train and development
managers to play a key role in the growth of the airline. This program include a six month
workplace orientation in departments, full of by in a month of workplace training in their
specific fields. The final phase include a business based project.
For those who have successfully completed the program, they will attain a internationally
recognized accreditation for a post graduate diploma. In Oman the airline hires 400 nationals
by the end of 2012 impositions been in all areas of airline operations.

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Financial development program

The airline has offered this comprehensive program to 7 participants in its financial
development training. In the span of next year this seven participants will go through various
areas of finance to gain a broad knowledge and experience in operations. At the end of their
training, each will be offered an employment contract with the department that smashed to
their skill experience and performances doing the training.
Management Information Systems
Etihad Airways, the national airline of the United Arab Emirates, has announced an
agreement with aviation IT specialist Lufthansa Systems which will see the airline use the
industry-leading flight planning solution Lido/Flight.
The contract with Lufthansa Systems, which also includes a number of Lido/Flight add-ons
and benefits, will see the Abu Dhabi-based airline optimise its operations by significantly
reducing its fuel costs and emissions, whilst also benefiting from more efficient flight
planning processes.
Drawing on its own powerful database, Lido/Flight uses a number of parameters to calculate
the optimal route for each flight, which can lead to cost savings of up to five percent. With
valuable functions running in the background, we will be able to operate our flights using the
best possible routings and with minimum emissions.
The contract with Lufthansa Systems includes a number of additional add-ons to Lido/Flight,
including Traffic Flow Restrictions (TFR), Inflight Monitor (IFM) and FreeFlight.
TFR achieves fuel savings by factoring in the impact of temporarily restricted airways, while
the IFM system provides updates on airspace restrictions, airport and weather data. FreeFlight
is an innovative system which allows airlines to take advantage of the emerging new
correspondent concept, which improves capacity and efficiency in air traffic management.
Stefan Auerbach, Senior Vice President Sales EMEA at Lufthansa Systems, added: "We are
proud that Etihad has expanded its cooperation with Lufthansa Systems and will rely on our
flight planning solutions to enhance their operational efficiency.

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Marketing
The process of marketing can be best describes as a process of communicating the value of
the product or the service to its customers. In order to successfully complete the marketing
process the airline must first engage in customer analysis to identify the customer segment
and meet their specific needs.
The marketing process involves firstly segregating the desired market, selecting the most
profitable segment, and then positioning the service or product in the mind of the customer
within that segment. To successfully realize this process a strong marketing principal should
be put in place with the right strategies and this is what the airline holds important. CCO
Peter Baumgartner described the marketing strategy at Etihad, after receiving the 2008
marketing award i.e. the Airline Strategy Award, that their marketing strategy is driven by
four principles. First, to avoid undifferentiated superiority second, to be inspirational to
the individual (they aim to act like a small airline, through personalised service in all
classes, even the economy class),third to behave like a luxury brand but dont lose sight of
the entire spectrum. Baumgartner says: We are a luxury brand and position ourselves as a
luxury brand, but everybody has aright to fly Etihad and experience a touch of Etihad
luxury, fourth is about promoting Abu Dhabi and lining up Abu Dhabis new image with
Etihads, through the new slogan From Abu Dhabi to the world (Airline Strategy Awards
2008).The integrated marketing mix for services can be summarised using the 7 Ps model,
which consists of Product, Price, Place, Promotion, People, Process, and Physical Evidence,
below is how Etihad considered each part, with regard to the Segmentation, Targeting,
Positioning (STP) process. (Place, Promotion and Process is discussed in the distribution
section)
Product:
The core product of the airline is it transportation, with luxury us supplementary services.
These services can be divided up into three main class as well as to subclasses. The key point
is to provide each targeted segment with the value that suit them. Both in-flight and on the
ground. Therefore differentiating product and differentiating their strategy is the airlines way
to provide different service says for each segment. For example, the airline targets business
travelers who are willing to pay higher prices for quality service also last-minute flyers and
long-haul travelers. In comparison, two economical flyers pool may not need last minute
flyer changes but cheaper prices.
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Price:
The airlines pricing strategy can be divided up into two sections. One section focuses on
offering lower prices than its competitors in order to gain larger market share. Walt the other
section provides services that are similar or better than its competitors a higher price. In the
first instance many factors currently help the airline to offer lower prices, such as oil,
knowing the government of Abu Dhabi who owns a large share of the airline gives the
company great opportunity and access to cheaper oil then its competitors.
According to James Hogan the CEO of Etihad Airways Our next goal is full break-even in
2011, leading to sustainable profitability from 2012 onwards. All our indicators show that
these targets are in our sights (ASC 2010), those goals were set after the last financial crisis
losses in company revenues rather than affecting the quality of services has been provided in
the last three years.
People:
Line employees almost 100 people from more than 120 countries regardless of its type
versification the company has managed a strong organization with culture and quality staff
through its specialized training programs. The airline provides new employees with all kind
of skill training to satisfy the airlines customers needs and maintain the value of the brand
through useful suggestions to the customers and quality work.
Specifically, all ground staff and aircrew are carefully selected because they reflect the image
of the brand and they can be a source of positive influence because theyre in the face and
mouth of the company.
In addition the uniform of the airline is designed by a talented designer who values comfort in
his design, this communicates a welcoming and hospitable value of the Arab culture and an
international cosmopolitan image of the airline. The airline aims to keep developing and
training it's staff through various programs to make sure ultimately it's customer are fully
satisfied with the services provided by the staff.
Physical evidence:
In the aviation industry physical evidence complies of everything that are visible to the
customer, it starts with the logo, uniforms, facilities as well as lounges and seats. The airline
provides offices superior cabin designs in all classes as well as well-known fashion designer

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to design the uniform of our stuff. Ultimately all of these physical evidence should show the
airlines commitment to ever in improving the customers perception of the service provided.
Management
Etihad develop the 21-month Graduate Management Development Program is designed to
train and develop managers to play a key part in the growth of Etihad Airways. The program
involves a six-month workplace orientation in departments, followed by eight months of
workplace learning with a specified team. The final phase involves a business-based project.
This management Development Program is founded in order to train and bring the human
resource standard level of the company up higher. As a result, managers of Etihad are carved
to become an effective, efficient, and specialised directly to Etihads customer base.
Controlling and management of people is so important for a company to be able to be at the
top, a strong team is necessary. With stronger teams of managers distributed to locations of
Etihads main offices worldwide, Etihad is able to shape a highly productive environment in
the organization.
Research & Development
Etihad has developed and launched an advanced new online micro-site to showcase its
award-winning products in the air and on the ground. Experience Etihad, a fully interactive
3-D tour, offers a unique insight into the airlines services across all three aircraft cabins, as
well as airport lounges and limo and coach services. Among the highlights is a detailed
demonstration of Etihads new first class suite. The micro-site also features video interviews
with Etihad Airways on board food and beverage managers.
The site is available in English, French and German, with Arabic to follow soon. Click on the
interactive tour link at the bottom of the Etihad Airways home page at etihadairways.com
Biofuel
In efforts to alleviate current fossil fuel crisis Etihad and Boeing airlines has combined efforts
to create a new avenue of fuel source, biofuel. The BIOjet Abu Dhabi program was initiated
to underline this effort. Richard Hill, chief operations officer at Etihad, told reporters the 45minute flight was the latest step towards operating commercial flights using biofuels, adding
that he expected such flights to be offered within five years. The Boeing 777 made a 45minute flight Jan. 18 with one engine running on a 10% blend of biofuel and conventional jet

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fuel. The biofuel was produced from cane using Amyriss direct sugar to hydrocarbon
(DSHC) feedstock-to-fuel pathway
In regards such changes, the public have taken in positive strides to Etihads effort toward
renewable engery. Working with Abu Dhabi-based renewable energy company Masdar, the
group intends to develop a supply chain that will bring aviation biofuel production and
refining capabilities to the oil-rich nation.
Masdar is currently developing salt-tolerant plants that could provide the raw material for the
renewable fuel. It is hoped that species such as salicornia could be grown in coastal areas,
allowing for large scale production of energy crops that could be grown without impacting
scarce water supplies in the region. Creating fuel from sustainable sources would help Etihad
curb its carbon emissions, the company said.
"In collaboration with our key partners, our goal is to support and help drive the
commercialization of sustainable aviation fuel in Abu Dhabi, the region and also globally,"
said James Hogan, president and chief executive of Etihad. "We have made some important
first steps in this process and our continued focus will be to develop further initiatives such as
this which will facilitate the availability of sustainable aviation biofuels for Etihad Airways in
the coming years."

Core Competencies

Core competency is defined by a firms ability to outsource its competitors and maintain a
competitive edge over its rival firms. There are four core criterias to meet in order to build
core competency and the sustainable competitive advantage over its competitors. Most
importantly however, to be competent at its core of companies must be valuable and unique
from the customers point of view.

In the section below the four criterias will be outlined.

Valuable

Rare
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Costly-to-imitate

Non-substitutable capabilities.

It is important to note the difference between ability at its core over simple competitive
advantage.

Valuable capabilities
Capabilities that are valuable allows the company to utilize opportunity to new Charlize
threats and an internal environment. Bye effectively using this capability to explore
opportunities that allows a firm to create value for the customer. In the case of the airline they
are committed to providing guess with outstanding travel experience from the moment of
booking to the moment of landing.
Furthermore the airline represented modern an arabia which defines Abu Dhabi as a nation.
Today Abu Dhabi is known around the world for having the very best five-star hotels and
tourism experiences around the world. Guess who visited this state of the art travel
destination are seeking maximum comfort, which requires the latest in-flight entertainment
systems and experiences such as fine dining. Etihad has recently upgraded a number of its
aircraft in the Business Class and Economy Class cabins, and its new Diamond First Class
Suite is now available on all routes with First Class. On the ground, Etihad has introduced a
range of services designed to make the travel experience as comfortable, smooth and fast as
possible.
In the air:
Diamond First Class: In August 2009, Etihad introduced its new First Class Suite, featuring a
luxurious Poltrona Frau leather seat that converts to a fully flat bed, a large wood-finished
table, Arabic-styled sliding doors offering complete privacy, a 23-inch personal entertainment
screen, a personal wardrobe with mirror, personal minibar, and four individual lighting
options with dimmers, in-seat power points and USBs. The First Class cabin also includes a
spacious and comfortable changing room with a leather fold down seat and full length
illuminated mirror. Etihads Diamond First Class was awarded Worlds Best First Class in
the Skytrax awards for two years running, as voted for by more than 18 million passengers
worldwide.

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Pearl Business Class: Etihads Pearl Business Class, featuring a seat that converts to a fully
flat bed, won the Worlds Best Business Class award in 2009, as voted for in the Skytrax
annual poll. New advanced Business Class seats are now being introduced, which are longer
and wider, all with direct aisle access in a 1-2-1 configuration. The seats include larger meal
and cocktail tables, luxurious leather headrests, armrests and ottomans upholstered by
Poltrona Frau, ambient lighting with dimmer settings, more in-seat storage space and a stateof-the-art Panasonic eX2 inflight entertainment system with a 15.4 inch personal screen.
Coral Economy Class: Etihad has rolled out a new service style in Economy Class. An
extension of the Inspired Service philosophy already embedded in its First and Business
Class cabins, the new service delivers greater levels of personal attention, touches of luxury
and greater choice and flexibility. The Inspired Service in Economy
Class includes hot desserts on select flights, an offering unique to Etihad, and a hot and cold
caf service with a wide range of hot beverages from cappuccino to green tea.This new
Economy cabin offers a new interior design. Seats are ergonomically designed for comfort,
with a 32 inch pitch, footrest and a deep recline. Each seat is also equipped with a handheld
controller, USB port and power sockets underneath the 10.4 inch personal entertainment
screen. A large pillow is provided. Small touches on the seat such as coat hooks and cup
holders make the space more individual.
Dining: The airline is renowned for its dining services on its first class and business classes
guess Contras whatever like they like to dine from array of menu or kitchen anytime menu,
which gives the best the opportunity to dine on wine whenever they choose. In 2011 the
airline introduced its first class chefs in the first-class cabin. Each inflight menu is tailored to
the route, typically including at least one dish inspired by the destination, one Taste of
Arabia dish and one Western option. On routes where there is a very high demand for
particular menu items (ie Indian cuisine on flights to the Indian Subcontinent, the Kaiseki
menu on flights to Japan), the menu is adjusted to include those tailored dishes and menu
offerings. Guests can indulge in a selection of complimentary drinks, including a boutique list
of wines hand-picked from around the world.
Amenity kits: for females guess who fly first class the airline offer fashionable black
cosmetic purse detailed with crystals by Swarovski. For male guess amenities include highquality shaving kit with razors and shaving cream from luxury brands.

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Both anonymity kid include basic items such as toothbrushes and toothpaste as well as
earplugs socks eyeshades and products all from high-quality brands of moisturizer hand
creams.
On select long-haul flights the economic class gets will also receive an amenity kit containing
many good-quality items in a travel pouch.
Family Travel: Etihad offers a variety of products and services designed to make travelling
with children more enjoyable. Etihad also offers special inflight menus for children and stateof-the-art inflight entertainment programs with more than 600 hours of movies, TV shows,
music and interactive games, including a kids only interface. On the ground, Etihads
signature First and Business Class lounges in Abu Dhabi, London, Manchester and Dublin
offer Family Rooms equipped to keep children busy and happy, with books, toys, television
and an exciting childrens menu. Further, Etihad lounges in Abu Dhabi offer nannies to watch
over children, taking care that they are safe, engaged and enjoy their time at the airport.
Inflight Duty Free: Etihad offers all guests the opportunity to shop inflight from the airlines
exclusives range, featuring up to 170 products. The range is perfect for selecting last minute
gifts for family and friends as well as showcasing many products that are either available
exclusively to the airline industry or designed specifically for Etihads guests. Customers also
have the opportunity to pre-order items online or via email to ensure their requested products
are available on board their next flight.

On the ground:
Lounges: Etihads First and Business Class guests receive access to luxury lounges across all
destinations, in conjunction with its airline partners. In Abu Dhabi, the airlines signature
First Class lounge offers guests a range of luxury services, including a complimentary Six
Senses spa, cigar lounge, champagne bar and la carte fine dining. In the Business Class
lounge, guests can enjoy a complimentary spa treatment from Six Senses spa, international
buffet cuisine, business, rest and relaxation and entertainment options. In both lounges,
prayer rooms are available and children can be kept entertained by nannies in a family room.
Etihad Chauffeur: Etihad Chauffeur is a premium limousine service that creates a unique
door-to-door experience for Diamond First Class and Pearl Business Class guests, with

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personal chauffeurs available at 28 Etihad destinations in 16 countries. In Abu Dhabi, the

airline offers a dedicated lounge for those passengers using the Etihad Chauffeur service.
Luxury coach service: Etihads Coral Economy Class guests can enjoy complimentary luxury
coach transportation between Abu Dhabi International Airport Sheikh Zayed Road in Dubai,
Dubai Marina or Al Ain.
Online check-in: Guests can save time by checking in online from 24 hours to two hours
before departure. Guests can check-in, choose their preferred seats and print their own
boarding pass to present upon arrival at the Bag Drop counter at the airport.
Check-in, Dubai terminal: A terminal check-in in downtown Dubai allows Etihad guests the
opportunity to check in six to 24 hours before a flight, check their baggage and travel to Abu
Dhabi airport via luxury coaches.
Check-in, Abu Dhabi Airport: Etihad provides porter and concierge facilities and a separate
check-in desk with spacious surrounds for First Class and Business Class guests, as well as
Etihad Guest Gold cardholders. For Economy Class passengers, Etihad offers dedicated
check-in areas for families and Etihad Guest Silver cardholders.
Priority boarding: Diamond First Class, Pearl Business Class and Etihad Guest Gold
cardholders can take advantage of priority boarding. An exclusive fast-track service is
available for First and Business Class passengers arriving into and leaving Abu Dhabi, as
well as a number of other destinations worldwide.
Rare capabilities
Rare capabilities are capabilities that few competitors possess.
Etihad Airways has opened its first dedicated premium lounge outside the UAE in Frankfurt,
Germany. The new lounge is a significant milestone in Etihads development and a step
forward in the airlines commitment to deliver products and services of the highest possible
standards.
The luxurious lounge opens three hours prior to the departure of Etihad Airways flights,
giving passengers an ideal opportunity to relax in style. Offering 5-star dining and range of
entertainment options.
The lounge in Frankfurt will be followed by others in international markets, including
Terminal 4 at London Heathrow, where Etihad relocates to at the end of September 2009.
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Lounge service for Families

Etihad has extended its services for premium passengers who depart from or transit through
Abu Dhabi airport with the introduction of specially trained nannies in its lounges in
Terminal 3.The nannies meet and greet parents and children at the lounge entrance before
taking them to the family room with their parents consent. There, the children can play with
the toys, read books and watch television all under supervision of the nannies who have
professional training in childcare and first aid.
Your car is waiting service
Passengers travelling with Etihad in first or business class will soon be able to book their
limousine service online using etihadairways.com
It is a complimentary service, which collects passengers from their door and brings them to
the airport, where someone will be waiting t escort passengers to the premium check-in.
Costly to imitate capabilities
Etihad Airways has redefined luxury air travel with its new first class suite. The new cabin
contains12 individual suites, designed to provide first class customers with more privacy,
greater comfort and increased storage.The highlight of the US $70 million (Dh 257 million)
first class revamp is an extra large seat that extends to a fully-flat bed. The full roll-out of the
new first class suites in the airlines fleet is expected to be completed by the end of 2010.
Highlights of
82 inches long private suite with a 80.5 inches fully flat bed, with bed width of 29.75 inches

Each suite with Arabic styled sliding privacy doors

23 inch personal TV/video screen, with in-flight entertainment system that allows customers
to pause, stop, fast-forward or rewind up to 600 hours of films, TV and radio programmes
and play games Personal beverage compartment
Illuminated wardrobe with a personal mirror In-seat massager, lumbar support and
adjustable headrest Spacious compartment areas where customers can stow their belongings
Poltrona Frau leather upholstery

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 Extra large (24 inches by 25 inches) wood finished meal table In-seat power sockets for
PCs, iPod connector, USB ports, Ethernet port and audio jack
Luxury changing room with full length mirror, raised wash basin and leather fold-down seat
Luxurious soft furnishings and designer amenity kits
Non-substitutable capabilities
Non-substitutable capabilities are capabilities that do not have strategic equivalents.
Etihad sponsorship of specific sports event as well as sports organization is their nonsubstitutable capabilities, it gives the airline long lasting great global exposure and to
potential.

COMPETITIVE ADVANTAGE
A competitive advantage exists when an organization has a significant edge over the
competition. It means that Etihad airline can do something competitors cannot do or has
something competitors lack. Etihad has to develop its resources, capabilities and service
products in order to win this difficult competition of airline industry. Etihad, being the
youngest airline comparing to the existing competitors, which are Emirates, Qatar and Fly
Dubai, even though this makes it is very hard for Etihad to gain competitive advantage over
its competitors, but Etihad can manage to hold some competitive advantages that made
Etihad Airways has received over 30 awards since its inauguration in 2003. Etihad, as being
the national airline of UAE, has to keep its pace with the competitors and maintain high
competitive advantages over the rivals. Its competitive advantage is the competence of Etihad
to leave behind its competitors as Etihad manage to provide products and services that
matches peoples need more than what its competitors can afford to provide. Because of its
advantage over all its rivals, Etihad has been growing very fast, or we can say, the fastest
commercial aviation in history with the tagline of From Abu Dhabi to the world. Even
though Etihad is surrounded by many direct competitors in UAE, such as Emirates, Air
Arabia and Fly Dubai, Etihad can still managed to stay in the front line among all the others
in the Middle East. The main competitive advantages of Etihad airline are Products and
Services, Quality and Route System.

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Products and Services

In the hospitality and service industry, the quality of products and services are very
important in gaining the competitive advantage. For the last couple of years, Etihad has been
trying to improve its products to suits more with todays peoples need and provide them with
over expected service in-flight. Etihad tries to maintain its quality of its product services, thus
they aim to provide the most comfort to the passengers. In the First class and the Business
class, Etihad provide them with the new suites called the next generation seating and in the
Economic class they launched Panasonic eX2 In-Flight Entertainment system in all the seats.
Panasonic eX2 is the most advanced IFE system in service operation today. There is no other
IFE system that can match its performance. Panasonic eX2 provides high value media content
capacity as well as Audio Video on Demand (AVOD) at every seat, to make sure passengers
will enjoy their time on board with most entertaining experience. Not only for First class and
business class, Economic class also gets to access live news, use USB file sharing and send
text messages and emails. This makes Etihad airways very outstanding from competitor, with
its new technology and designs within the aircrafts.

Quality
Etihad Airways considered service quality to be the most important thing to become
successful in the business. The service Etihad provides to its customers is the highest global
standard only. By travelling with Etihad, customers will experience the best of Arabian
hospitality onboard. Etihad Airways targets customers who seek to fly comfortably and
relaxingly on a luxurious hospitality service. According to the customer service quality bench
marking study done by Ethos Consultancy, Etihad Airways scored 91.5% in terms of
customer satisfaction in 2010. Also in 2012, Etihad was the winner of the Air Transport
Worlds Passenger Service Award and was well known as the carriers excellent customer
service products and offerings of a premium service. Service of Etihad is the combination of
the best hospitality on flight with comfortable environment provided by the well-selected
Etihad employees from more than 120 countries around the world.

Route system
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Partnership and alliance: Etihad currently has codeshare partnership with 43 carriers.
Etihad has emerged as a leader in building up partnerships outside the main global alliances.
Etihads partnerships and alliances grows very quickly and parallel with the partnership
strategy, Etihad is building its own operation by opening up another 8 new routes in 2014
from Abu Dhabi. The destinations will be the US cites of Los Angeles and Dallas Fort Worth,
European gateway of Zurich and Rome, Perth in Western Australia, Jaipur in India, Medina in
Saudi Arabia and Yerevan in Armenia. And in order to support the rapid growth of the
business, Etihad will have 20 more new aircrafts to come in 2014 including their very first
airbus A380 superjumbo and Boeing 787-9 Dreamliners. Also another 5 Boeing 777-200LR
aircrafts will be bought from India to help support Etihad to have enough aircrafts to fly its
customers around the world
To conclude, Etihad airline has its own strong competitive advantages that helps them to stay
as one of the most well-known airline in the Middle east and also in the world. Etihad cannot
stay still and always try to walk one step ahead of the competitors. Etihad believes that the
exclusive Arabian service it provides and the products it use for the customers can create
customer value for its organization, which makes Etihad a successful airline industry.

VALUE CHAIN ANALYSIS

In the operation of a business, deals with a lot of activities and all of them have their
own costs one way or the other. The company must create value in its products and services
to cover up its costs. Value Chain Analysis in the business is how do you change business
inputs into business outputs in such a way that they have a greater value than the original cost
of creating those outputs? It includes sets of activities that an organization carries out to
create value for its customers. The value that's created and captured by a business is the profit
margin. If the Value that the organization create and captured is more than the Cost of
creating that Value, it turns out to be the Profit Margin for the organization. The more value
an organization creates, the more profitable it is likely to be. And when the organization can
provide more value to its customers, it also builds Competitive Advantage over its
competitors. Value can b measured by product performance characteristics and Product
attributes for which customers are willing to pay.
Influential work by Michael Porter suggested that the activities of a business could be
grouped under two headings:

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1.

Primary Activities- are the activities that directly concerned with creating and

delivering a product in the business. The activities involved in the development, production,
sale, and distribution of an organization's products and services to its customers and after sale
support. They consist of the following:

Inbound logistics These are all the processes related to receiving, storing, and

distributing inputs internally. The supplier relationships are a key factor in creating value
here.

Operations These are the transformation activities that change inputs into outputs

that are sold to customers. Here, the organizations operational systems create value.

Outbound logistics These activities deliver the product or service to the customer.

These are things like collection, storage, and distribution systems, and they may be internal or
external to the organization.

Marketing and sales These are the processes the organization use to persuade clients

to purchase from you instead of your competitors. The benefits you offer, and how well you
communicate them, are sources of value here.

Service These are the activities related to maintaining the value of the organizations

product or service to its customers, once it's been purchased.

2.

Support Activities, unlike Primary Activities, Support Activities are not directly

involved in production, may increase effectiveness or efficiency. It is rare for a business to

undertake all primary and support activities. It is the activities that sustain primary activities
and other support activities of a business. Companies use these primary and support activities
as "building blocks" to create a valuable product or service.

Procurement (purchasing) This is what the organization does to get the resources it

needs to operate. This includes finding vendors and negotiating best prices.

Human resource management This is how well the organization recruits, hires,

trains, motivates, rewards, and retains its workers. People are a significant source of value, so
businesses can create a clear advantage with good HR practices.

Technological development These activities relate to managing and processing

information, as well as protecting a company's knowledge base. Minimizing information

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technology costs, staying current with technological advances, and maintaining technical
excellence are sources of value creation.

Infrastructure These are a company's support systems, and the functions that allow it

to maintain daily operations. Accounting, legal, administrative, and general management are
examples of necessary infrastructure that businesses can use to their advantage.

As a matter of facts, the characteristics of hotel products come in the different features from
ordinary products. This is where problems arise. Normally, products in the other markets are
tangible that tend to follow the two categories of business activities, primary and supporting
activities. But in the service industry, the main products are intangible, and that is service. As
a result, the value chain of intangible product might use different approaches to the analysis.
According to a research on New Dimension of Porters Value Chain published in the IMS
international journal in 2006, the value chain for services are explored to five attributes of
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primary activities and four attributes of supporting activities which will be further clarified as
following:

Primary Attributes of Value Chain for Services:

1. Service Design
2. Knowledge Management
3. Delivery Systems Management
4. Moment of Truth Management
5. Service Competition Management

Supporting Attributes are:

1. People (Human Resource Management)

2. Process Information
3. Physical Aspects
4. Punctuality and Reliability

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Primary activities
1. Service competition
For Etihad, the most important activity is the Service competition. High service
competition gives Etihad competitive advantages over its competitors. Every business has
competitors all around. As we know, Etihad is a young airline comparing to its existing
competitors. It is very difficult for Etihad to compete with the competitors and leave them
behind. But Etihad has got many of its own services that give it competitive advantages.

For the ground product offerings of Etihad, all Economy class passengers have free
access to Wifi Internet, printing, luggage storage, family lounge, and prayer rooms at Etihad
Terminal Abu Dhabi. And in order to ensures that its customers who travel to the Far East
countries will receive some privilege for being the customer of Etihad as well. They will have
unlimited access to the First and Business class lounge in every major cities airport in China,
Indonesia, Malaysia and Thailand. Especially in Thailand, which Bangkok was the first long
haul destinations in Far East countries, Etihad focus a lot on Thai market segment. After its
seventh year of flying this route from Abu Dhabi to Bangkok, Etihad introduced its regional
Thai language website to help Thai customers to access to its service faster and easier.

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Some more additional services that Etihad provide to its passengers are:

VIP Services:
Customers are given the royal treatment with personalized itineraries, concierge
services, restaurant reservations, and event tickets and more. The VIP members of Etihad are
treated with a premium level of service.

Etihad Express Coach Service

If you're traveling to or from Dubai or Al Ain, we have a fleet of luxury coaches
designed to offer the same service and comfort that we offer on our aircraft.

This coach service provides the airlines Coral Economy Class guests with complimentary
luxury coach transportation between Abu Dhabi International Airport and Etihad Travel Mall
in downtown Dubai, Dubai Marina or Al Ain. The fleet of Mercedes-Benz coaches is
equipped with elegant interiors, ergonomically-designed seats, climate-control, an
entertainment system and high-resolution 14-inch monitors.
Online check-in:
Guests can save time by checking in online from 24 hours to two hours before
departure. Guests can check-in, choose their preferred seats and print their own boarding pass
to present upon arrival at the Bag Drop counter at the airport.

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Check-in, Dubai terminal:

A terminal check-in in downtown Dubai allows Etihad guests the opportunity to check
in six to 24 hours before a flight, check their baggage and travel to Abu Dhabi airport via
luxury coaches.
Check-in, Abu Dhabi Airport:
Etihad provides porter and concierge facilities and a separate check-in desk with
spacious surrounds for First Class and Business Class guests, as well as Etihad Guest Gold
cardholders. For Economy Class passengers, Etihad offers dedicated check-in areas for
families and Etihad Guest Silver cardholders.

Priority boarding:
Diamond First Class, Pearl Business Class and Etihad Guest Gold cardholders can
take advantage of priority boarding. An exclusive fast-track service is available for First and
Business Class passengers arriving into and leaving Abu Dhabi, as well as a number of other
destinations worldwide.
2. Knowledge management
The second most important activity for Etihad airline is Knowledge management. It is
to gain useful informations for the organization, especially the information about the

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customers need. Knowledge management relies heavily on the ability to understand and
know how to provide service to customers in such a way that would satisfy the customers. If
Etihad knows what its customers expect from the airline, it can provide more than what
customers expect in order to exceed the customers expectations, which will also adds more
value to the company and further more gain the Competitive Advantage for the company. To
create a competitive advantage requires developing and leveraging organizational knowledge
of both the internal and external environments and the various levels within the organization.

Most of the countries in the Middle East are Islamic countries and therefore Etihads
passenger who travels Etihad Terminal in Abu Dhabi; passengers are given with big prayer
rooms for men and women to pray when they need to do their prayers. Etihad itself is a
Middle East airline, and UAE is in the center between Western countries and Eastern
countries. Etihad faces very diverse market of customers. Therefore, Etihad also employs a
very diverse workforce to cope with its market. The airline has spent great amount of money
and time on training the staff to ensure its professionalism while providing service to multi
culture passengers onboard. The Human Resource department has to put great effort in
educating staff to help giving them positive recognition as being professional staff in service
industry. Airline business has to deal with passengers from every country all over the world.
Passengers travelling with Etihad are multilingual and therefore, Etihad staffs need to be very
diverse and also need to be able to communicate not only in Arabic but also English, French
etc. The staff of Etihad can improve their communication skill in the training centre Etihad
provided.

Etihad focuses on the convenience of its passengers. At Abu Dhabi, the passengers are
provided with chauffer service and online check-in service, which is very convenient for
those who do not like standing in lines and also online check-in service is very time saving.
At the Abu Dhabi airport, Etihad has its own terminal, which helps to save time even more
for luggage transferring and picking up.

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3. Service design

Before any service provider can provide their services, they need to design their
service first. The service provider must know what they need and be clear of the vision and
mission of the company. Also the service provider needs to be very sure that the service and
products has enough value in order to make customers buy it from them. This is an important
activity in the value chain. Once there is poor design, we can be sure that there will be
customer dissatisfaction. Designing a service is complicated unlike designing a non-service
product. In order to design a service product, one needs to understand the nature of the target
market and how sensitive are customers to the quality compared to price. Not every customer
will like the same kind of service. Each service provider organization must create its own
service design to be different from its competitors. Etihad needs to study its customers and
develop is service according to the customers need and not what the organization need.
Hence, service design is like planning how to deliver the right service to the right customer
and the design work according to customers demand.
4. Delivery system management
It is basically the management of how do you deliver you your own uniqueness to customers
and how to make them perceive the value in your service. It is truly important for the
organization to have a consistent service delivery management to guide service provider to
follow the same standards. Etihad is a luxurious airline that comes with reasonable price. By
traveling with Etihad, as it is an Arabian airline and seen as the representative of UAE
national airline, Etihad had to make sure to provide a prestigious Arabian culture and heritage
to its passengers who are the customers. During the long distance flights Etihad serves hot
beverages, multiple course meals and also hot desert. In the flight to Japan, Etihad launched
Japanese in-flight service with traditional Kaiseki menu for Japanese dinning, including Sake,
Japanese tea and Asahi beer onboard. Also in all flights to Seoul, Korea, the menu in the
flight will be changed to Korean menu instead, in order to make the Korean passengers feel
more comfortable in-flight.

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5. Moment of truth management

A moment of Truth occurs when a customer comes in contact or interacts with the service
provider and experiences their level of quality. It is a very important moment that can change
all the outcome of the service of the organization. A positive moment of truth with customer
is a good sign to have surely satisfied the customers. But a negative moment of truth causes
dissatisfied to customers who will look for the alternative chooses to travel with the other
airlines that can match their needs. Moment of truth plays a very important role of
maintaining good reputation of the company. Etihad has been doing great jobs all this time.
Along with the help of the other facilities that the airline provides to its passengers for their
convenience, according to the customer service quality bench marking study done by Ethos
Consultancy, Etihad Airways scored 91.5% in terms of customer satisfaction in 2010.

Supporting activities

1. People (HRM)
For Supporting Activities, Etihad believe that people is its most valuable key successes,
therefore Etihad select its cabin crew very carefully with its own unique way of selecting and
training its people to become the best in the industry, which also gained them the award
winning cabin crew title. Etihad believe that as long as its can keep the employees happy,
they can be sure the employees will treat the customers very well with happy faces as well.
Therefore, all the cabin crews and pilots of Etihad will get to travel around the world by
allowing them to visit every destination they go, so they can relax themselves and come back
to work happily. Etihad provided 1st in industry in-flight chef for the First and Business class.
Etihad employs more than 9,000 staff which representing more than 120 nationalities from
around the world. The airline is also committed to pioneering opportunities for the UAEs
national population, and through its Emiratisation Program, offers a wide range of training
opportunities for Emiratis, including a cadet pilot scheme, a technical engineering
development program and a graduate management development program. Etihad also opened
the aviation academy in Abu Dhabi in order to make sure they can provide their staff with
special trainings for both skills at works and good personality to be the best service provider
in its field.
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The people Etihad seeks are those who can relate to the vision to be the best airline in the
world and bring to life its five corporate values.

Those 5 values are:

Acting positively: to be open, honest, and supportive in all that you do.
Caring about detail: to anticipate guest needs, Get it right, and always be consistent.
Taking responsibility: to take initiative, be proactive and persistent.
Delivering best practice: to always be Safety aware, efficient and strive to be better.
Inspiring our customers: to be passionate, caring and inspirational.

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The following table gives the staff numbers for the top 20 largest national groups
working at Etihad Airways in December 2011.

The following table gives a breakdown of how the workforce is made up by regional
grouping in December 2011.

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The following table gives a breakdown of how the workforce is made up by divisional
grouping in December 2011.

The biggest division in the organization goes to the airlines Operations Department, which
includes pilots and cabin crew. It employs more than 6,230 people.

HR operations
Etihads Human Resources department has evolved considerably ever since the
organization has established. The Human Resource department was the one that mainly
responsible for issuing company work visas and administrative matters but not the job has
become o challenging for Human Resource department. It plays a key role in the strategy of
company and staff development. Etihad has plan and predicted its future market in 2020 to
have been flying more than 25 million passengers and to fly to more than 100 destinations
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aboard a fleet of 150 planes. In order to meet its goal, Etihad will need a workforce of
approximately 22,000 people.
The growing number of employees drove a significant increase in employee administration,
necessitating a continuing focus on automation and bureaucracy.
Self service functions for employees and managers in HRs online system called iserve
increased by a further 71% and the new Employee Services intranet site provides employees
with a one-stop shop for information on many employee policies and procedures. 98% of all
email employee queries were responded to within defined service level agreements.

2. Physical aspects

Physical aspects are everything about Etihad that customers can see and if they are impressed
with what they see, that means the physical aspects of the organization is well managed.
Etihad tries to present itself as an Arab heritage airline and giving the customers the best of
Arabic hospitality service. The facilities inside the air crafts are useful and convenience.
Passengers onboard get to access live news, use USB file sharing and send text messages and
emails. The Panasonic eX2 In-Flight Entertainment system shows how much Etihad
concerned about its customers needs.Physical aspect as well means customer service. Etihad
also has strength at customer service.

Service recovery: Etihad Airways is committed to offering its guests a superior customer
service, and has a dedicated team in place to manage customer relations before and after a
customer travels with Etihad Airways, divided into Guest Affairs and the airlines CARE
unit.

Etihad Airways understands that a customers travel experience with Etihad Airways
sometimes does not live up to their expectations. When this occurs, the airlines Guest Affairs
department will do everything possible to respond to complaints appropriately, in a timely
and empathetic manner.

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The CARE unit is set up specifically to proactively manage customer service issues, at Abu
Dhabi international airport, and is called upon to assist at other outstations for some issues.
The unit provides support to the ground staff in the event of a disruption, or to a guest when
an issue occurs; for example if the guest has a problem at check-in.

3. Punctuality and Reliability

Punctuality and Reliability of the organization reflects the management and the
quality of the organization. The organization that has the least error with few customers
complains tends to be successful in business. Time is valuable. And for the business people,
every minute is important. If Etihad causes some faults or delay in flight schedules, it would
surely loss its reputation and also would cause weakness to the organization. Etihad has to
run its flight on schedule to show its professionalism it operating airline business and if
Etihad is always flying on time and never cause any mistakes during operation, it would give
Etihad a much higher competitive advantage over its competitors. Once the customers are
satisfied with the service of one service provide and the service provider can afford to provide
the same quality service every time, the customers will be loyal to the organization and will
continue using the service of Etihad every time he or she travels.

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In 2011, Etihad received a Punctuality Award Long-haul Airline - Brussels Airport

Aviation Awards

4. Process Information
Last but not the least important of supporting activities, every big industry today is
using Information Technology to help them manage information easier and faster. IT and
telecommunication services help to connect service provide to customers without having to
meet each other. For example, the website for Etihad that is also available in Thai, makes it
very convenience for Thai customers to get any information they want from online and as
well as book the tickets.
Etihad has a mass number of passengers and another 9000 workforce to be
responsible. Etihad has secured strategic partnerships with some of the worlds leading
suppliers including Amadeus, SITA, SABRE, Lufthansa Systems, Oracle and Microsoft.

Sabre Airline Solutions:

An activity of significant impact for the entire company in 2011 was the selection of Sabre
Airline Solutions to supply Etihad Airways passenger services solution (PSS), eCommerce,
and departure control system (DCS). Almost all operational and business areas. The deal with
Sabre was worth more than a billion dollars at list prices and will be the biggest technology
innovation Etihad Airways will undertake in the next ten years.

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IMPORTANT ENVIRONMENTS THAT ETIHAD NEEDS TO BE

AWARE OF:
3 important segments of the external environment:
1) Technological and physical segment
These two segments are clubbed together because they go hand in hand. By
technology we refer to the new aircraft models, new technological demands; and by
physical we refer to the environmental damage airlines do, and the growth of bio fuels
for future generations. For airlines, technology has always been and will be their most
important segment. This is because technology and the airlines are directly
proportional to each other. They both depend and rely on each other. Technology can
help an airline reduce costs in terms of fuel efficiency and consumption but on the
other hand airline technology does not come cheap and it still will pollute the
environment no matter what. Etihad must be aware of these two segment because the
fossil fuels (whom airlines are very much dependent on) are depleting in todays
world and therefore alternative solutions required. Oil prices are becoming higher at
the same time. However there are better aircraft models coming out which help reduce
fuel consumption and are environment friendly, but this is not the solution. The
solution is investing and developing bio fuels so that there is less environmental
footprint and dependency on fossil fuels. Also it will show Etihads commitment to
the environment as stated in their vision and mission.
2) Economic segment
The second segment that Etihad must be aware of is the economic segment. Countries
in MENA are undergoing political crisis which is also known as the Arab Spring;
while Europe has been recovering from its own economic crisis. These political crisis
in MENA are affecting the economic growth of the countries in those regions. This is
indirectly affecting Etihad because nobody wants to travel to those places anymore.
Tourism is down as well. Therefore the economic segment is important to Etihad
because it affects their revenue. They must keep up to date with the latest news and
strategize their plans accordingly because MENA and Europe are the first 2 target
markets, therefore they cannot afford not to capitalize on these regions.
INTERNAL ENVIRONMENT:
Three main Internal Environment factor which Etihad is doing well and should focus
on. Firstly I would say Etihads strength of their research and development is very
interesting and unique. Etihad is in efforts to alleviate current fossil fuel crisis Etihad
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and Boeing airlines has combined efforts to create a new avenue of fuel source,
biofuel. Abu Dhabi program was initiated to underline this effort. If the research and
development succeed, Etihad will be able to gain more revenue from lower cost of
energy source and showing to the world that they care about environment, not just
saying but doing. Many companies tries to have an image of concerning to the
environment and Etihad is one of the few companies who is committed and taking the
issue seriously.
Etihads Distribution would also be one of its strength; they have been building a
strong system. Etihad puts great effort in producing products with awareness to the
customers needs as well as graphical markers of each market. Which is to in turn
comply with different advertisements, loyalty programs as well as sponsorships.
Lastly, their innovative resources, sporting sponsorships along with other commercial
expansions show at the house from commitment to expanding its innovative
resources. As a result of these efforts to improve the services on the airline it has been
rewarded with an array of prestigious awards across the world.

ARE THE VISIONS AND MISSIONS CLEAR AND

MEASURABLE?
After reading the visions and missions of Etihad we can see that the vision of Etihad
airline is also closely linked to its Arabian heritage in particular. The vision of the
airline is also to become one of the global airliners that exude a truly 21st century,
where challenges, and changing environment, plus an engaging vision to break the
convention, constitutes its deep rooted vision. Etihad Airways mission like any
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considerate corporate is to give a refreshing welcoming to their guest, where travel

should be safe and secure in an environment that is friendly, and where global
standards in both terms is practiced, be it hospitality or in the technical aspects in
assuring a safe journey for its guests.
However the vision and mission are not clear and measurable in the environmental
aspect. Etihad has been slow in its commitment to the environment and do only what
is minimally required, that is follow the code of IATA. However they have not gone
out of their way to make sure they are environment friendly and conscious as a
company. There are no activities or practices highlighted in their main services which
shows they are genuinely interested in the environment. The only activities they do
are buying better planes, and practicing fuel efficiency, coupled with minor
environmental practices that may be practiced on board.
What is interesting is that their commitment to change the conventions of the airline
industry and deliver Arabian hospitality is very clear and measurable. Etihad is known
to be the fastest growing airline in the world, are already under the umbrella of the big
3. They display Arabian hospitality through their services and values, which can be
measured through the various awards they have received over the years. Their fleet is
increasing rapidly and recently they put an order of $25.2 billion from Boeing. That
was statement of intent that Etihad only wants to grow further. Also their economic
situation and development since the start of the company indicates that Etihad really
do want to challenge globally and be the best airline.
Therefore to conclude I would say that their vision and mission on being the best
airline and delivering Arabian hospitality is clear and measurable to a certain extent,
but on an environmental basis more work needs to be done in order to match your
statement.

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