Etihad Airlines

Etihad Airways isanairline company based in the United Arab Emirates.It is well known as the airline company that has the fastest growth throughout commercial aviation history.(Etihad Airways, 2010)

Its services were launched November, 2003on the 12^th. Its operations began with the launch of the airline’s services to Beirut. It operates cargo and passenger services to various destinations that totalled to 85 as of January 2012.

Alongside being the airline company that has had the fastest growth in commercial aviation history, it is also the airline that has made the largest order of aircraft, as well. That was in June 20, 2004 of twenty four aircraft buses, which comprised of 4 A380-800s and 5 Boeing 777-300ERs. (Etihad Airways, 2010)

The organizational structure of Etihad Airways comprises of a board of directors and an executive team, which then flows down to the managers and the other employees.

The board of directors is headed by HH ShaikhKhaled bin Zayed Al Nahyan. The board is responsible for the governorship of the company. Its mandate is stipulated in the Article of Association of the Company. (Etihad Airways, 2010)

The members of the board, include non-executive members, is 7 as well as two sub-committees, which have independent chairmen and charters. The sub-committees are the Audit Committee and the Executive Committee. (Etihad Airways, 2010)

According to review of 2010, the board consisted of, Ahmed Ali Al Sayegh, , Hamad Abdullah Al Shamsi, Mubarak Hamad Al Muhairi, Khalifa Sultan Al Suwaidi and Mohammed Mubarak Fadel Al Mazrouei(Etihad Airways, 2010).

James Hogan is the president and chief executive officer of the company. His appointment was in 2006. His mandate is under the executive team(Etihad Airways, 2010).

Etihad’s mission and vision is to be the best airline in the world. The core values of Etihad are social responsibility and sustainability. They are fully committed to ensure that its management has a positive environmental impact. (Etihad Airways, 2010)

Profitability is also a key strategy for the airline. It intends to use the profits towards contributing to the Abu Dhabi 2030 plan. (Etihad Airways, 2010)

The company seeks to increase its global destinations. More specifically the airline sets to reach out to Thailand, China, and South Korea by establishing fifteen extra destinations as well as two lounges by 2019.

On an outlook by 2030, Etihad Airways seeks to augment its customer experience through installing 3D screens as well as increase its product offerings.

The company also seeks to create diversity among its employees and to ensure that the employees are well cultured to high quality service delivery.

In addition, it wants to develop its home airport such that it has latest facilities and infrastructure. (Etihad Airways, 2010)

The products and services of Etihad Airlines are mainly:

-Cargo transport;

-Passenger transport (Etihad Airways, 2010)

According to a business review conducted in 2010, corporate facts and figures from 2009 and the traffic results from Etihad Airways of 2008, the table below gives an analysis of various economic factors in terms of turnover of the company

Fig 1 analysis of various economic factors in terms of turnover of the company

Fig 1analysis of various economic factors in terms of turnover of the company

According to the CAPA center for Aviation, Etihad Airways has not been profitable and seeks to break even on profits in 2012. That explains why they haven’t published their profits. (Etihad Airways, 2010; Ivan Gale, 2007)

In the recent past, there has been a global economic recession that has seen fuel prices scale up. This has been of their main challenges. However, it has been Hogan’s strategy to reduce the company’s expenses without reducing the quality of services that the company offers. This is set to enable them deal with the increased fuel prices. The irony is that Etihad is based in an oil rich region. Etihad, however, is an airline company and has its competitors based all over the globe. Therefore, it is strategic that they gain competitive advantage by cutting down on its expenses. (Etihad Airways, 2010; JetAviator7, 2012)

The other problem that Etihad Airways faces is obtaining permission in form of airport slots, so it can operate in other countries. This has become particularly difficult during the recession. Most of the nations in a bid to protect their home airlines held back slots that would have otherwise been allocated to foreign airline companies. Examples of countries in which Etihad Airways was affected include Australia, Singapore, and Germany (Travelwerke, 2011). The lack of slots undermines Etihad’s goals, one of which is to expand its operations in order to connect Europe to the Middle East. (Etihad Airways, 2010; JetAviator7 2012)

Etihad’s market base is also threatened by the invention of better aircrafts based on current technology. The aircrafts majorly possessed by European and Asian companies who are Etihad’s competitors have a larger passenger capacity as well as a longer mileage. (Etihad Airways, 2010; JetAviator7, 2012)

Corporate Social Responsibility is a core principle of the airline. It is a sponsor of Harlequins Rugby League, Abu Dhabi Grand Prix of 2009, and Docklands Stadium, just to mention a few. (Etihad Airways, 2010)

Environmental sustainability is one of Etihad Airways core values. It adopted a new policy on environmental management together with Masdar Future in which it is set to abide to the reduce, reuse and recycle policy. (Etihad Airways, 2010)

Conclusion

Undoubtedly, Etihad Airways is one of the most successful companies in the recent past. It has broken two historical records in the commercial aviation history since its establishment in 2003.

Despite the fact that the airline faced multiple challenges, one of which threatens its competitiveness with regards to technology, the company has a large growth capacity. It has been ambitious enough and if the same pace is maintained, it may just get to achieve its vision of being the best airline company in the world.