What’s Gone Wrong With Etihad?

In recent months, many travellers have noticed Etihad Airways’ seeming disappearance from flight searches. From Brazil bound routes to the closer-to-home, Borg El Arab airport in Egypt, Etihad’s reach has been shrinking. Naturally, this suggests all is not right with the UAE state airline, but recent reports point instead to a new, leaner beginning.

Market changes upsetting the established order

In the last few years, we’ve seen the collapse of several airline brands. From big, longstanding US names such as TWA and US Airlines, to the flash in the pan products of Australian Airlines – all failed to find their niche in an overcrowded market with high levels of competition and customer expectations. And to many observers, Etihad appeared to be going the same way.

Launched in 2003, Etihad’s routes and fleet expanded rapidly across the Middle East and further afield. This was largely due to a drive by the heads of state to make Abu Dhabi the next fastest-growing business and tourist destination in the world. Their long-term vision included a billion dollar Louvre Abu Dhabi, The Formula Rossa, the world’s largest indoor theme park and the founding of the New York University Abu Dhabi.

For a long time, the investment seemed to be paying off, Etihad was a big name flying hundreds of diverse routes on a variety of different machines. The brand became synonymous with Middle Eastern Luxury. However, following an unexpected slowdown in passenger numbers, investment collapses in London and the US, and the knock-on effects of cross-industry investment loses in airlines such as Air Berlin and Alitalia, the board decided it was time to bring in some fresh blood.

A new airline concept

Last year, Tony Douglas, an old industry hand, was tapped up for the top job and immediately began completely re-envisioning, restructuring and realigning the troubled airline. His concept for the airline is a hundred miles away from the glorious, flag bearing global leader envisioned by the state. But with so much investment and infrastructure already in place, it would be foolhardy to let the airline slip away out of pride.

Douglas went on record stating the need for a more rational mission statement. In today’s air travel market, being a dominator takes more than just limitless investment and it’s not a role every airline can play. Instead, he called for better operational efficiency, and this translates as trimming away the fat of excess routes that offer brand presence rather than profit. And of course, this means many jobs landed on the chopping block too.

Good news for travellers

By concentrating instead on point-to-point traffic to destinations between Abu Dhabi and where its visitors live, Etihad can be the bigger fish in an infinitely smaller pond. A reduced fleet and route map will also help it design a product that meets customer demand for reliability, competitive prices and good service. In short, Etihad, has seen what it needs to do to remain a player in the field and by delivering a smaller boutique product, it may even work better to support the state’s vision to increase tourism and business to the area, too.

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