Etihad Airways has quietly built itself into the world’s
fifth-largest airline group. It's done so by cobbling together its own alliance
structure, and the carrier's clear aim now is to pull select business travel
southward from Europe.
“Quietly” might seem an odd term, considering the public
Open Skies dustup
between the biggest three U.S. airlines and three Persian Gulf carriers,
including Etihad, about the latter group's rapid growth. But Etihad claims less
volume than its peers. While Etihad has 200 aircraft on order over the next 15
years, which will almost triple its current fleet size, Emirates still will
dwarf Etihad. “We’re still half the size of Emirates, and we couldn’t catch up—even
if we ordered as many aircraft—from a scale and operation perspective," president
and CEO James Hogan said during the Global Business Travel Association’s annual
convention. “We felt it was smarter to achieve access to market and then
integrate and build a different model.”
That model has consisted of equity investments in several
other airlines, including Airberlin, Alitalia, Virgin Australia and India’s Jet
Airways. Thus Etihad operates a group with about 700 aircraft that it can shift
between airlines as needed, Hogan said. The airlines can share sales resources
as competition rules allow, and Etihad has invested in the carriers’ loyalty
programs, he said. Those carriers also provide network connection to such major
markets as Germany, Italy and Australia—building blocks toward Etihad's aim to
make Abu Dhabi a crossroads for the Middle East and India.
Some of the carriers associated with Etihad also are in the
major airline alliances. Hogan said he has no interest in pulling them out, but
don’t expect Etihad to be joining up itself. “We may be disruptive, but I don’t
believe in the alliance model,” Hogan said. “It’s fractured and dominated,
whether they be American or European, by the major players, and it squeezes
competition.” Instead, Etihad has developed codeshare agreements with more than
50 carriers, he said.
As it grows, Etihad's “hard focus on the customer” has
translated into ultraluxury cabin offerings like residences with personal
butlers and on-board showers, as well as enhancements in other classes of
service. Business class, for example, includes the customizable dining options
usually reserved for first-class passengers on other airlines, and even economy
class carries “little surprises and delights” like adjustable neck pillows and
midmovie popcorn service, said vice president of guest services Linda
Celestino.
“Most of our corporate guests travel in business class or
first class, and it’s around intelligent living,” Celestino said. “It’s about
how we create a space or environment to re-create life as you want it on that
flight experience.”