Analysis of Etihad Airways - Case Study Example

Name: Course: Date: Professor: Analysis of the Etihad Airways. Etihad Airways is one of the world’s most famous airline carrier based at the Abu Dhabi in the United Arab Emirates. This organization is well known for its quality cabin crew services it provides to its clients. The cabin crew is made up of highly qualified beverage and food managers, cabin mangers, cabin seniors and cabin crew who are dedicated to providing quality services to its clients, hence the organization’s top reputation globally. The airline operates in various destinations globally including Africa, Asia, Americas, Middle East and Europe. Alongside the airline services, Etihad airways operate other services including Etihad Cargo and Etihad Holidays (Saleem, 2010). The organization has its head office in the Khalifa City in the Abu Dhabi international airport where the organization’s corporate activities are controlled at. The organization is governed by the board of directors consisting of seven non-independent executive members, an audit committee and an executive committee. The boards of directors are responsible for coming up with legislations, rules and policies which govern the organization. The winning of the World Travels award is one of the contributing factors among other wards which have contributed to this organization’s excellent performance and positive public picture (Lastrou & Oretti, 2007). This airway carrier operates in a total of 86 destinations globally. These destinations are located in a total of 42 countries distributed across Africa, Americas, Europe, North America, Asia and Oceania. Etihad provides quality in-flight entertainment services to its clients meeting their comfort. The organization has partnership agreements with other airline companies which promote the company’s operations. These include the Aer Lingus, Bangkok Airways, Jet Airways and American Airlines among other airlines. Therefore, this paper will analyze in detail this airline operation including its marketing strategy, objectives, flyer programs, and its membership ties among other organization’s operations (Vedder, 2008). One of the objectives of the Etihad airlines is to provide airline carrier services to its esteemed customers globally with the dedication of meeting their clients’ expectations. Additionally, the airline was established in the United Arab Emirates to bear the flag globally. The acts of the airline were to carry the organization’s flag globally to its guests and express their level of hospitality to these nations. Furthermore the airline company wanted to provide the most modern flights to its customers hence, creating a competitive air transport market for its competitors (Ramavarman, 2010). Furthermore, the airline was established with the core objective of ensuring that it unified the Eastern countries and the Western countries through the provision of its air services with the Abu Dhabi being the core Centre of all of these business operations. The organization aimed at providing luxurious tourism airline services to its clients and quality air cargo services to its clients alongside its other airline services. The airline cargo is handled with the responsibility of transporting precious cargo, goods and pets among other products. The organization operates in a system of products share to ensure that it maximizes the profits acquired from the sale of their products and services (Lastrou & Oretti, 2007). To achieve the overall success in the competitive market, the organization came up with a carefully planned marketing strategy which acted as a driving agent towards the achievement of the organization’s goals and objectives. One of the marketing strategy adopted by this organization included coming up with both the short and long term goals to be achieved under specific duration of time. Breaking even by the year 201 was one of this organization’s short term goals. This was to be achieved through decreasing the flights costs which could ultimately lead to increased sales associated with the reductions of their flight costs (Zeith, 1988). Additionally, this organizations short term objectives was to maintain its customer value through decreasing its services costs. The status quo of this organization was going to be maintained through the reductions of their costs of services hence, making the organization become the most luxurious in its services provision to their clients. The organization came up with long term objectives which could enable it maintain a quality market strategy. This included increasing the amount of their profits annually by 5-10% facilitating its competitiveness. Furthermore, increasing their customer’s value by a rate of 8-10% by the year 2015 was stated as the organization’s long term objective. Etihad had a long term objective of opening up Abu Dhabi to the outside world and increase the UAE staff by the year 2013 by 15% (Etihad Airways, 2010). Product strategy was adopted as a method of contributing to the competitiveness of the Etihad in the market. This included providing both passengers and goods air transportation. To achieve its competitive advantage, Etihad airways augmented their products components both in terms of their product strategy and flight transport systems to the Abu Dhabi. The products components which contributed to this organization’s competitiveness included Etihad Diamond First class, Etihad Coral Economy Class, Etihad Crystals Cargo and Etihad Holidays among other products components (Milne, 2009). The organization’s decision to have the Abu Dhabi to be its capital is one of the market strategies which contribute to this organization’s competitiveness. This is because; Abu Dhabi is one of the most growing cities in terms of economic development. Unlike other airline carriers which do not have lounges for the unaccompanied minor customers, the Etihad developed lounges for these individuals as a method of marketing strategy which contributed to its attractiveness hence, the competitiveness. This is accompanied with the development of the youth programs which contribute to its competitiveness (LaSalle, 2009). The organization’s decision to adopt effective pricing strategy as a method of acquiring its competitiveness has contributed greatly to this organization’s great performance. This involves delivering somewhat services when compared to its competitors including the \British Airways and the Emirates airline. Place strategy adopted by the organization involving the distribution of its tickets both at the main offices and the agents globally has contributed to its excellent performance and positive picture to its customers. Additionally, place strategies such as online selling of its tickets and 24 hour customer care services have enabled the organization penetrate to the airline global market (FlightStat, 2010). People strategy is another strategy adopted by this organization to achieve its desired market competitiveness. This includes employing well educated staff both on the ground and the air. The staff is trained to have skills such as being helpful and courteous to meet their customers’ demands. The provision of a simpler process for its clients has positively contributed to this organization’s competitiveness at the global market. This involves the use of less effort in services such as booking to the departure of the clients in their airports. The provision of check-in and check-out services at the various Etihad destinations has simplified the passenger’s travelling process (Basit, 2010). The physical evidence market strategy used by this airline has created customers’ awareness to this airline and their services. This include the ETIHAD AIRWAYS written on their aero planes, in-flight entertainment systems, varied menu for its customers, sitting arrangements, spacious airport layout and its quality marketing team are some of the physical marketing strategies adopted by this organization enhances its visibility and attract its customers hence, its competitiveness. Various promotional strategies employed by this organization has enabled it penetrate into the global market attaining its competitiveness (Zeith, 1988). These strategies include the sale promotion strategy which involves providing bundles offers to their customers, direct marketing strategy where the organization markets its products and services directly using its employees by use of the verbal means of communication. Additionally, the airline provides sponsorship programs as its marketing strategy and advertising its services and products in all the media channels to create customer awareness. Gifts provision to its loyal customers and its staff has contributed to its penetration to the global airline market. Provision of print promotion services by the Etihad airlines has facilitated the distribution of the airline’s brochures to its customers which has facilitated the creation of consumer awareness (LaSalle, 2009). Taking into consideration the customer value through customer analysis process was employed by this organization to enable it achieve its desired goals and objectives. This involved working towards meeting its clients’ needs though the provision of transport services mainly to customers travelling to and out of Abu Dhabi. Therefore, this analysis led to the organization segmenting its customers basing on their purpose of travel hence, determining the customers’ categories. In addition, it is through customer analysis that this organization decided to provide tourism carries services to its esteemed customers (Saleem, 2010). The Etihad competencies are associated with its geographical location in the United Arab Emirates. This is due to it being the only United Arab Emirates airline carrier. The location connects both the eastern countries to the western countries hence, its fast development. However, the organization is facing some vulnerability which is mainly associated with it being young in the airline business market. Therefore, the organization is heavily investing on programs which will enable it achieve world class status as compared to its active competitors such as the Emirates airways (Etihad Airways, 2010). Etihad airlines introduced an all economy service provision to its clients which consisted of the short, medium and the long haul services. The short haul operations involved the use of the airbus A320 which will carry a maximum of 162 passengers. This introduced system is associated with advantages such as increased demands for the economic premium traffic and increased number of flights to their destinations. However, the short haul Etihad airlines will be operating on various destinations such as the Alexandria, Damascus, Colombo, Calicut and the Thiruvananthapuram. Additionally, this system of operation is associated with advantages such as reducing the demands of consumer premium tariffs (FlightStat, 2010). The airline is required to expand its economic fleet in order to achieve the objectives of the short haul flights introduced in the organization. This will include increasing the fleet to a 10 A320 aircraft which will facilitate the launching the short haul travel destination. Launching of the short haul destinations will result to the airline offering its customers with more competitive services in the airline markets. Geographically, the short haul destinations will include the markets in the Asia, North Africa, Indian subcontinent, and the Middle East markets. The services which will be provided to its customers include set back entertainment services and the provision of both cold and hot beverages and meals to its customers during their travel (Lastrou & Oretti, 2007). On the other hand, the medium haul Etihad destinations refer to airline services which will be carrying people and goods to various destinations such as the United Kingdom. This will enable the airline increase its capacity to their destinations. The airlines will be transporting a maximum of 300 passengers as compared to the previous airlines which used to carry a maximum of 200 passengers. In addition, the Etihad fleet will be increased from A330 to B777 airlines. Long haul Etihad destinations are those which are designed for long distances transportation of the people and the luggage. Geographically, the long haul will involve the transportation of these products to various destinations including Australia, the Americas, Africa, Europe and Asia. The airlines will have specific features such as presence of bassinets for babies and individual in-flight entertainment service provision alongside the provision of beverages and meals during the travel (Milne, 2009). Abu Dhabi, the capital city of the Etihad airways is the hub of the aviation industry. This is because; the city is the home land of the Etihad and the Emirates airline. The country’s central location in the Middle East places it to be a hub of most of the Middle East’s airline businesses since it connects both the Western and the Eastern nations. This geographical location has contributed greatly to the infrastructural developments including the development of international airports in this region making it a hub to other business destinations. Due to its location, many flights use this country as a connecting point to other nations such as the Western Asia, Europe, and the United States hence, acting as a hub to these nations (Vedder, 2008). The minimum passenger connection time in the Abu Dhabi airport and its associate Etihad airports have been lessened with the adoption of the online booking of air travels. This has been made possible through the provision of responsive customer care which provides assistance to its customers. However, customers can only book tickets for a flight for a nine people which is considered to be the maximum number in this organization. One of the Etihad lounges is the first class lounge. This longue is mainly concerned with providing its clients with high quality services, space, style and serenity (Ramavarman, 2010). The clients are provided with services which promote customers’ comfort and relaxation hence, meeting their demands. The clients receive wide variety of treatments including the SPA treatments where clients are provided with a 15 minutes relaxation treatment which promotes rejuvenation and relaxation while travelling. Other treatments provided in the se first class lounge include the facial renewal services, scalp massage, and foot detox among other services. Additionally, the clients are provided with business facilities such as the internet access, unlimited entertainment, and cigar at the lounge, refreshing facilities and provision of meals and beverages at times of meals. These services lead to the organization’s improved performance due to its massive attraction of its customers (Vedder, 2008). The business class longue, another longue in the Etihad airways I provide comfort services to their clients which also promote relaxation. These include services such as the refreshments offered in their showers, provision of the luxurious SPA treatments, five star dining and provision of pleasure and business facilities such as free internet browsing at their lounges. Additionally, the world wide lounge offers similar services to those provided by the business and the first class lounges. The Abu Dhabi international airport serves a total of 31 destinations with a total of 19 countries being served by this airport. Additionally, the airport serves a total of three continents including Europe, America and Africa (Lastrou & Oretti, 2007). Frequent flier program is one of the programs which are offered by this flier airline to its clients. The clients are enrolled into a program which accumulates the frequent flier distance in kilometers, segments and points in relation to the distance flown by the airline or its associate partners. These acquired miles may be redeemed by the customers for free air travel, services or goods, and other benefits which include first class lounges access, travelling class upgrade and priority bookings. Therefore, this method acts as a source of motivation to the customers which promote more travels hence, source of capital to the organization (Ramavarman, 2010). One of the methods which can be used to obtain the travel points is the use of the miles accrual travelling/flying method. This method involves the airline rewarding its travellers who have a certain number of points obtained from the distance traveled by the customer. For instance, a customer may be awarded a point for every mile they travel using the Etihad airways. However, the number of points varies depending on the destined country and whether travel is internal or an external travel. These points can be redeemed by the customer for benefits such as goods or services or free air travel (Milne, 2009). In addition, the miles accrual cards are provided by this airline to its associate customers. These credit cards are mainly used by the customers for purposes such as spending and acquiring bonuses on every travel they make with this airline company. The issuers of these credit cards usually partner with this airline organization in order to offer their clients the abilities to transfer the acquired points into the airline’s program. The issuers also partner with this airline agency in order to provide their co-branded cards to these customers. This method is important since it allows customers who are not frequent users of the airline services to effectively maximize these programs (FlightStat, 2010). Furthermore, value on a distance traveled such as a mile is used as a means of frequent fliers program to the Etihad clients. This method allows the customers to evaluate the costs of their accumulated miles travelled with the use of this agency services. This is mainly influenced by the methods of redeeming the acquired points from the miles covered by these customers. An example is paying the customer a customer less value than the required amount for a particular air travel. Therefore, this system enables the customers travel to some areas at specific travels with a lower cost as compared to the normal air flight charges (Etihad Airways, 2010). Etihad airlines also allow its customers receive the points awarded for their travels in their own names without using this travel agency’s name. By doing so, the organization will be providing its clients with benefits which are free from tax. However, there have been criticisms over this method since most of the Etihad’s competitors have considered it to be a means of bribing the customers to consider their services. The individuals are given full ownership of the points earned on the mile travelled and have the freedom to redeem these points for any service or good from the organization (LaSalle, 2009). Mileage run has been adopted by this organization as one of its frequent flier programs. This program involves the customer benefiting from travelling by being awarded bonus points if they have previously travelled with this agency. The customer will benefit from this program through achieving the program’s desired goals depending on the miles they have travelled for with the agency. Therefore, this method is advantageous to the customers since they can be able to re-qualify for other benefits at different elite levels. The customers can redeem the points earned for any options they like from the alternatives provided by the organization (Zeith, 1988). The Etihad customers can earn a variety of rewards as a result of redeeming the points earned from their travelling. The award provided by this company includes the open seat and the guest seat awards. The open seat awards refers to awards which can be booked by the customers on any day of their travel basing on the points earned from the miles travelled by these customers. On the other hand, guest seats awards are controlled mainly by the miles being travelled by the customer and the fixed redemption charges. Other methods of redeeming the points include redeeming the points for either goods or services provided by the Etihad airlines (Saleem, 2010). Etihad airways has partnered with various other business organizations to ensure that it maintains quality services provision to its customers and the provision of the frequent flyer programs to its customers. The organizations which have partnered with this organization ranges from the hotel, financial, car rentals, shopping, discount, airline, leisure and telecom industries to ensure that it maintains its level of quality services provision to its clients. Through these partnerships, the customers have been able to have a positive perception towards this airline agency. These perceptions include efficient air transportation, moderate costs of travelling, easy booking and high quality services provision among other beneficial perceptions (Rotrigues, 2010). Flexibility in traveling with the Etihad airline is one of the benefits associated with the adoption of the frequent flier programs by this organization. This is due to the customers’ ability to redeem their points whenever they feel the need to travel with this agency. The system provides the customers with varied options to choose from concerning their mode of payments i.e. they can pay cash for the travel or redeem their points. Furthermore, the customers can redeem their points even if it is their first time travelling with the agency. The clients can earn cash from the redemption of the points alongside being provided with a wider range of rewards which they can choose from (Etihad, 2010). However, Etihad airways have faced a lot of challenges with the implementation of these frequent flier programs. This is due to the increase in the rates of frequent air travels from its customers. These incidences have increased both in its intensity and frequencies. Furthermore, the increased rate of hyper mobile travellers in this industry has led to a greater disproportionate contribution of the industry to greenhouse gases emissions from the aviation industry. These frequent flier programs have also contributed to the increased competition between the Etihad flying company and its competitors. To curb these challenges, the organization has come up with various measures which have been put in place which include developing restrictions, and tight policies (Basit, 2010). In conclusion, the methods which have been adopted by the Etihad airways to enhance its quality performance and market penetration have contributed greatly to the overall excellent performance of this organization. The provision of quality customer care services to the customers, highly skilled personnel, moderate costs associated with the agency and partnering with other sectors in the air transport industry have played a great role in this company. The company’s dedication towards achieving the world’s best airline service provider should be enumerated by other airline companies. Therefore, the company should work towards providing its services to more countries lacking its air transport services. The company should also focus on the environmental and social sustainability promotion alongside the economic contribution. Reference list. Basit A. (2010). UAE Airlines Outperform Rivals in Service Quality. New York: Sage. Etihad Airways (2010). Factsheet. Abu Dhabi: Etihad Airways. Etihad Airways (2010). Book Your Flight-Etihad Airways. Accessed on 13th May, 2013, from: http://booking.etihadairways.com/pl/EtihadOnline2/wds/OverrideServlet?_utma. FlightStat. (2010). (EY). Etihad Airways On-time Performance Rating-Flightstats. Accessed on 13th May, 2013. Available at; http://flightstats.com/go/FlightRating/flight rating By Carrier.do?airlineCode=EY. LaSalle J. L. (2009). On Point Abu Dhabi City Profile. Abu Dhabi: Jones Lang IP Inc. 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