Research Paper on Etihad Airways

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Introduction

In July 2003, Etihad Airways which is the national carrier of UAE was established by Royal (Amiri) Decree of Abu Dhabi. The youngest carrier of UAE, Etihad Airways, has successfully achieved its goal and able to achieve its position in global airiness within a short interval of time (Cole, 2013). It has successfully records its name as the most quickest growing airlines in the global airlines amid the end of a decade ago. The name ‘Etihad’ which is an Arabic word refers to ‘United’. The name and its meaning is suitable for the brand as it has managed to unite the west and east at the centre of Abu Dhabi. The purpose of this airlines is justified by its present tag line – “From Abu Dhabi to the World”. Etihad Airways has won several awards and one of them was – ‘World Leading Airline’, which was won at the 2009 World Travel Awards. Further, ‘Best Marketing Strategy of the Year 2009’ was also won by Etihad Airways which was presented by the Middle East Business Achievement Award (Cole, 2013). The Etihad airlines is supported by various travel agents across the world, operated in 42 countries, currently provides the international network of more than 64 destinations. Not only this, to build the big network, Etihad has code sharing agreement with 23 of the world airlines. Beside the main business line of the company, they also provide Etihad Holidays for the customers. They also handle the precious cargo and pets of customer, international transportation of goods by operating Etihad Crystal Cargo. The revenue of the Etihad Airways exceeds more than 2.3 Billion USD in the year 2009. As comparison to the growth of market of other industries which was 22%, Etihad reported the growth of passengers’ revenue by 24.5 % (Rahman, 2017).

SWOT Analysis of Etihad Airways

SWOT method help us to identify the company’s internal status and proposed threats. The Strengths and weakness that are identified are internal and controllable whereas threats and opportunities are always external and uncontrollable. The market advantage, high market value, brand images and many more are the strength of Etihad. The details SWOT Analysis of Etihad Airways is shown below (Nataraja & Al-Aali, 2011).

 
Customer Analysis

There are many international airports in the United Arab Emirates. The customers for Etihad Airways, the region carrier of Abu Dhabi, are based in Abu Dhabi and Al Ain. So for Etihad Airways, the target customers are the passengers who travel to and from Abu Dhabi International airport. They focus on outbound holidays and travel from Abu Dhabi. Tourist and business people from Abu Dhabi are the current target segments for the airline. Moreover, they focus on the customer who like to travel with luxury and high standard of hospitality. According to James Hogan, currently Etihad has shifted their focus on the segmentation of customers according to the purpose of their visit. Thus the segmentation are tourist , personal, religious, business and in-transit passengers (Golf Business, 2017). Abu Dhabi is developing very rapidly in terms of both tourism and business. According to Abu Dhabi Tourism Authority (ADTA), there is a huge increased in the growth of tourist every year. So the Etihad Airways must target both outbound and inbound visitors for both business class and tourist to Abu Dhabi.

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Collaborators Analysis

Etihad Airways has always maintained its relationship with different company, suppliers, travel agents who act as their sales person and establishment to increase their capability which has help them to increase their market share and profitability (Cole, 2013). This relationship with different organisation helps them to deliver breakthrough capabilities in airline business. Etihad relationship with Travel port GDS helps them to achieve more viable and proficient to data analysis and upgrading key decisions in ticketing and booking the data. Further it helps them to examine booking information from various sources i.e. from ticketing, income and expense data, sales and so on. They have built codeshare agreements with different other airlines too and recent progress is their tie-up with American Airlines (Cole, 2013). They have established their network with Manchester City Football club, Formula 1 team and other big brands. This has help them in the growth of sale and profit maximization.

 

Competitors Analysis

Fly Dubai, Air Arabia and Emirates Airlines which are located in UAE are the direct competitors of Etihad Airways. Beside this, the airlines which are based outside then UAE like Qatar Airways, Oman Air and Gulf Air are also the competitors of Etihad. Moreover, Singapore Airline and other different international airline also can be the potential new threats to Etihad. But as compare to other, Emirates Airline is the main competitor. So Etihad also benchmarks its activities and strategies according to Emirate Airlines (Cole, 2013). Some of the competitors of Etihad are mentioned in the table below (Surovitskikh & Lubbe, 2008).

Etihad

PESTEL Analysis

There are several factors that affect the Etihad’s macro environment in the decision of marketing strategy. Some of the issue can be in the favour of company and some are not. The PESTEL analysis of Etihad is as follows (Nataraja & Al-Aali, 2011).

 

The United Arab Emirates aviation industry leading aviation industry in the world having huge market in the Middle East and North African Region. Etihad Airways and Emirate Airlines are both leading airlines of this industry (Rahman, 2017). Emirates Airlines is one of the competitors of Etihad Airlines. Beside Emirate Airlines, Air Arabia is also another competitors of Etihad Airlines in comparison of low cost market strategy. Different Telecom industry and Holiday cruise line Industry poses a threat to Etihad Airways because due to the innovation of video conference there is huge decrease in number of people to travel from one destination to another for business purpose. The facilities provided by Holiday cruise line industry such as transportation, hotel setting and various activities on board such as hotel, shopping and casino attract the people to travel in cruise rather than airlines (Rahman, 2017). On the other hand, Emirates airlines also provide the same service on same price and some other airlines provide on low price compromising on services. But Etihad has competitive advantage in terms of product. They have their own private terminal at the Abu Dhabi International Airport, which is developing rapidly as the future business and tourism hub in the middle east. Moreover, they also provide chauffeur service for their passenger. Further, they also allowed passengers to check-in prior to 24 hours which saves the time of passenger while check-in where they do not need to arrive at the airport early (Etihad Airways, 2017). Many customers desire to have low cost flight and even with the airline which do not have fringe benefits due to the global recessions. And there are already those airlines which provide cheaper flight like Oman Air and Jet Airways which are the threat in terms of substitute products to Etihad airlines. There is high intense of competition between Etihad and Emirates, when one offers something another also does it and vice versa (Cole, 2013). There is also threats of new entrants as UAE is developing rapidly and can be the airlines hub of future. Currently, Boeing and Airbus are two main giant supplier of aircrafts which make the bargaining power of supplier higher than Etihad. But Etihad can reduce cost by choosing the option to buy in bulk to tackle this situation. But the bargaining power of customer is always low than airline industry (Nataraja & Al-Aali, 2011) .

Etihad invest huge amount in marketing which has three categories- Brand management, Visual Communication and Sponsorship & Exhibitions. The Etihad policy of change and adoption are endemic for the survival of company. Etihad always adapt their products and service according to market trend. The slogan of Etihad which changes from time to time such as ‘From Abu Dhabi to the world’, ‘Fly with the best’ promises customer what they want (Etihad Airways, 2017). They launched tailored personal in-flight entertainment showcase with a campaign in TV called “He likes; she likes”. Being the member of global Airlines, Etihad has affiliations and bilateral relationship with different airlines such as Are Lingus, Air Serbia, Jet Airways, Alitalia and Virgin Australia to proliferate the company’s network and to offer the customers (Cole, 2013).

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Marketing Strategy
Product Strategy

Air transportation service on both goods and passengers is the core product of Etihad Airways. Abu Dhabi is developing rapidly as tourism hub of the middle east which can be competitive advantage for Etihad. The product offers by Etihad as mention in their portfolio are as follows.

With the presence of its private terminal at the Abu Dhabi International Airport, it provides the competitive advantage to Etihad as compare to other airlines. They also provide the chauffeur service for its passenger of Diamond first class and Pearl Business class passengers. To save the time of passenger, they allow to check-in prior to 24 hrs (Ethos, 2015).

Almost all of the airlines lacks the service of lounges and place for unaccompanied minor passengers. So Etihad can develop such facilities for these untapped segments. Etihad can introduce minor programme to help to get more potential customer by providing travelling facilities for the kids from age 8 to 18. To remain on safe side, airlines can have consent form that needs to be fulfilled and signed by parents or guardians 24 hours before departure. Any customers having excess baggage should be charge less amount of fee if it was declared before 24 hours. Further they also can have the facility of the baggage at the door pick up for the regular passenger which helps them to travel without any hassle. Moreover, they can start their Express 2d service within the United Arab Emirates. As Jet Airways provide hot towel to the economy passenger also, they can try to attract potential customers (Ethos, 2015).

Price Strategy

At recent, Etihad Airways has market penetration pricing strategy which helps them to have market share in UAE. Etihad is trying to attract potential customer by providing same service as provided by Emirates Airlines and British Airways. If Etihad Airways increase the price of their product by 10 % then they will be in the same category as Emirates Airlines in comparison of price factor. This will help to avoid the perception of low value brand as compare to Emirates Airlines and British Airways in front of customers (Ethos, 2015).

Place Strategy

All over the world, not only from the main office and branches, Etihad Airways sales its ticket through general sales agent also. Passengers also can buy the ticket online through its corporate website. Passengers’ can choose the ticket according to their budget and necessity. Further customer also can call to their call centre for the reservation of ticket and choose the seat if available (Cole, 2013). In future, I recommended that it can add the number of branches and more general sales agents all over the world. Further they also can establish a stall inside the mall where passengers can buy the flight tickets.

People Strategy

In the survey conducted by Ethos Consultancy, Etihad get 91.5% in a customer service benchmarking (Ethos, 2015). This is all possible as they have well educated and trained staff both on air and ground. The staff are courteous and helpful to provide all the needs and demand of the passengers. Further staff are very informative and they do not hesitate to provide suggestion (Ethos, 2015).

Etihad should invest more in training and development of staff as it is the part of service industry. Although the airlines of variety of products, more fleets, cheap price but at the end of the day, passengers judge it through its customer service. At the end, experience of the passenger counts and that make the huge difference in future business.

Process Strategy

For the passenger travelling from Etihad Airways will experience simple and easy process from the time of booking to depart or arrive from Abu Dhabi. As they have their own terminal in Abu Dhabi International airport, the process become easy and simple. Further they provide the various range of check-in process which simplify the travelling process for passengers. The available different check-in process is shown below (Etihad Airways, 2017).

 

Physical Evidence Strategy

We can define physical evidence as the environment where the service is delivered to the passenger. In other word, this is the evidence which is visible to passengers. In case of Etihad Airways, the unique way of written ‘ETIHAD AIRWAYS’ act as visible evidence. Further it includes logo and the Royal Decree symbol on its aircraft tail. Due to their unique uniforms, staffs and crew are easily visible from the spot which also acts as a part of their physical evidence strategy. Moreover, as a part of physical evidence, we can count on the wide range of menu offer by Etihad, entertainment system and so on. Passenger can enjoy the audio and video option. Most entertainment products such as movie are available in more than three languages and subtitles are also provided. Moreover, passengers can also enjoy the games and quizzes to pass their time on board. It is visible that the marketing team of Etihad has choose a lot of effort to design a positive vibe for customer through attractive royal dresses of staff, tangible assets as to provide good experience to the passengers (Cole, 2013).

Promotions Strategy

The tool used by organisation to create the ability and desire of purchase to the potential customers is known as promotion. The following are the different promotional strategies used by Etihad airways to attract the potential customers (Nataraja & Al-Aali, 2011).

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Recommendations

Some of the recommendation for Etihad airlines are as follows:

  • Etihad should develop better business model to adopt maximum profitability which

    can broaden their horizons.

  • As mention in weakness of Etihad, it is found that the economy class is poor. So they

    need to change the economy service.

  • They must focus on the reduce of substantial cost and reduction of duopolistic routes

    rivalry. They most ensure more strategic planning are involved for the reduction of

    flying cost and expenses to survive in any financial crisis (Franke, 2007).

  • Etihad can expand their aircraft or specific cargo service to their market to get more success as compare to their competitors. Moreover, they also can expand their allied

    function to have a competitive advantage.

  • Etihad can improve the customer’s service and attract the customer by the

    introduction of loyalty programs, attractive discounts and other promotional offers.

 
Reference List

Cole, A. (2013). Analysis of Etihad Airways. GRIN.

Ethos. (2015). Emirates Airlines narrowly edges out Etihad to top Airline Service Quality Benchmarking Study. Retrieved from Ethos: https://www.ethosplc.com/emirates- airlines-narrowly-edges-out-etihad-to-top-airline-service-quality-benchmarking- study/

Etihad Airways. (2017, January). Etihad Fact Sheets. Retrieved from Etihad Airways: http://www.etihad.com/en-us/about-us/corporate-profile/

Franke, M. (2007). Innovation: The winning Formula to regain profitablity in aviation? Journal of Air Transport Management, 13(1), 23-30.

Golf Business. (2017). King of the Skies: James Hogan Interview. Retrieved from Golf Business: http://gulfbusiness.com/king-of-the-skies-james-hogan-interview/ Nataraja, S., & Al-Aali, A. (2011). Competitiveness Review. Emerald Group Publishing Limited.

Rahman, S. (2017, February 2). UAE aviation sector hits great heights. Retrieved from Gulf News: http://gulfnews.com/business/aviation/uae-aviation-sector-hits-great-heights-1.668799

Surovitskikh, S., & Lubbe, B. (2008, March). Positioning of selected Middle Eastern airlines in the south African business and leisure travel environment. Journal of Air Transport Management, 75-81.

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