Etihad Airways

More Aircraft…More Destinations

Though a fairly new entrant in the Indian aviation scenario, Etihad Airways has big plans. Charles Phelps-Penry, regional manager - South Asia spells out what lies ahead

The Company

Charles Phelps-Penry

Based in Abu Dhabi, the capital of the United Arab Emirates (UAE), Etihad Airways was set up as the national airline of the UAE in July 2003 by a Royal decree issued by Sheikh Khalifa Bin Zayed Al Nahyan, then the Crown Prince of Abu Dhabi and deputy supreme commander of the UAE Armed Services. Soon after, Dr Sheikh Ahmed Bin Saif Al Nahyan was appointed chairman of the airline. The airline was started with an initial paid-up capital of AED 500 million. Its name sums up the spirit in which the airline was created: 'Etihad' is Arabic for 'united'. The airline launched its services in the Indian market on September 26, 2005 with a daily service from Mumbai and then moving on to Delhi with three flights a week. Says Charles Phelps-Penry, "We started off as a full-service carrier and not a low cost or budget carrier, to provide our passengers with the best of services."

The airline grew at a phenomenal pace, adding almost one new route a month. The airline ended 2004 with as many as 16 destinations across Asia, Europe and the Middle East. As of 2005, the airline flies to 18 destinations with 9 aircraft. On the fleet front, Etihad recently created history by placing the largest order ever for new aircraft by a new airline; it will also be one of the first to fly the new A380. However, the backbone of the airline's fleet is the Airbus A330 while it also operates the Boeing 767-300.

The other divisions of the airline include Etihad Holidays that offers more than 170 hotels in over 35 irresistible destinations in 14 countries to fit a variety of budgets. Etihad Crystal Cargo offers a comprehensive range of cargo services on all flights of the airline's network.

Business Strategy

With an aggressive start-up, the airline has even more aggressive strategies. Elaborating on the airline's strategies, Phelps-Penry, we would be getting our new aircraft from September, which is also the month we would complete a year of servicing the India market. However, we aim to double our network by next year that would mean approximately 36 destinations worldwide. Growth in the Indian market has be significant which can be gauged from the fact that we average a load factor of about 70 per cent in India and 60 per cent globally. We are taking on a new communications agency for better interaction with the Indian industry. Subsequently, a new strategy has been put in place wherein we are 'understanding the Indian guests and their needs'. By doing this, we hope to offer our passengers the best Indian service on board. Plans are afoot to look at a guest recognition programme in future. The airline-tourism nexus is another area of focus which we plan to tap extensively as we are looking at promoting Abu Dhabi as an ideal tourist destination, Indians could look forward to visiting. In this regard, the Abu Dhabi Tourism office has already been set up.

The importance of the Indian market to us can be gauged from the fact that India is the third largest country in our network. In keeping with this trend, we are still working with the trade and understanding their workings but we aim to do good business. Subsequently, with rising costs be it fuel or even distribution, we are working with the travel industry in India to find ways and means to cut it down. Finally, our objective is to be an elite 21st century airline setting standards in the industry

Future Plans

On a global scale the airline has seen an annual of growth of 5 per cent but in the Indian context it is 20-25 per cent, which substantiates our focus on this important market, says Phelps-Penry. Etihad's plans for India are big, starting with more destinations like Bangalore, Kochi, Thiruvananthapuram, Chennai and Hyderabad, which the airline is keen to service to the expansion front on a global level, wherein by 2010, Etihad plans to take this figure to nearly 70 destinations. In 2004, Etihad Airways created airline history by placing, in its very first year of operations, orders worth US$8 billion for new aircraft. At the Farnbourough Airshow in July 2004, Etihad placed a US$7-billion order for 24 Airbus aircraft, including four of the double-deck A380. In September 2004, the airline signed a US$1-billion deal with Boeing for five 777-300ER aircraft. On a futuristic note, the airline plans to add the first of the 777-300ER aircraft to its fleet by October 2005, while the first of the Airbus aircraft will join its fleet by January 2006. In 2007, Etihad will add the A380 in its fleet.

On the cost front, the airline plans to initiate the e-ticketing process much before its deadline that is by 2007. A booking engine is also being developed to help reduce costs. While on the tourism front, with the kind of growth the India market is showing, the Abu Dhabi Tourism office would also look at setting up an office here in future. However, what needs serious upgradation are the Indian airports be it terminal capacity, aircraft parking taxiways or even the runways, everything is very basic and needs to be spruced up.

Vision

The aviation industry is vital for tourism growth in India. However, the current growth pattern is excellent and the industry will continue to see new start-ups. But infrastructure needs to be handled in a much-structured way if the growth has to be handled. The only thing foreseeable in future is consolidation of the new airlines and better offers for passengers. With the growth, there would certainly be more increased employment in the aviation sector. Indian airports should also focus on developing their retail sector as if seen globally, a lot of airports thrive on the retail business.