Executive profile: Etihad Airways
By Dave Demerjian
Business Traveler, September 2007

It's been quite a ride for Abu Dhabi-based Etihad Airlines. Just four years old, the United Arab Emirates flag carrier has become one off the fastest growing airlines in the Middle East, rapidly adding destinations and aircraft to its fleet. This year Etihad walked away from the prestigious World Travel Awards with a clutch of prizes, including that of Middle East's Leading Airline. Etihad's CEO James Hogan, who joined the airline in late 2006 from Gulf Air, attributes the airline's success and rapid growth to a three-prong strategy. "We're committed to growing our network, building greater frequencies and connectivity into our schedule, and developing one of the best products in the industry."

Etihad currently offers flights to 44 destinations in the Middle East, Europe, North America, Africa, and Asia, serving major global business centers like London, Paris, New York, Toronto, Bangkok, Manila, and Johannesburg, as well as also secondary markets like Dublin, Manchester, UK, and Kochi, in Southern India.

 At the heart of the Emirates network is Abu Dhabi. "Abu Dhabi is not only a growing business and leisure market, but is perfectly located as a bridge between East and West," Hogan says. "It's both a major destination in its own right, and a connection point to the rest of our network, and is working very well as a hub for us." Hogan says that Etihad is constantly seeking ways to enhance connectivity at Abu Dhabi – for example, adjusting the schedule of its New York-Abu Dhabi flight earlier this year. "This change has had dramatic impact on the numbers of passengers flying from the US to onward destinations and vice versa," he explains.

Hogan describes Etihad's growth strategy as prolific but also strategic. "We are always evaluating potential destinations based on demand from the market." He says that many of the airline's key routes are performing exceptionally well, including Toronto-Brussels-Abu Dhabi and London-Heathrow to Abu Dhabi, which he says is regularly booked close to full capacity. He's also pleased with some of Etihad's newer routes. "Our flight to Dublin is operating with load factors of 85%, and we've increased our Abu Dhabi-Sydney route to daily service. We're confident of strong returns on routes from North America, key European destinations, and Australia."

Etihad currently operates 25 aircraft, a mix of Airbus 330s and 340s and Boeing 767s and 777s. To support its rapid growth, the airline will add six aircraft to its fleet this year, and has a total of 14 on order, including four A380 super-jumbos. Hogan is also contemplating the addition of narrowbodies to the fleet. "A320s would allow us to better serve regional routes in the Middle East," he says. "Obviously, this region is very important to us."

Etihad has invested heavily in its in-flight product, offering a two- or three-class configuration depending on the route. Etihad's Diamond Zone first class cabin offers lie flat seats that rotate a full 180 degrees, allowing passengers can hold face-to-face meetings, as well as fine dining, comprehensive entertainment, in-flight wi-fi technology and Bvlgari toiletries. Business class passengers also enjoy lie flat seats and a variety of perks, but Hogan says Etihad's commitment to service extends to all passengers. "We offer one of the most spacious economy class seats in the business," he says. "And we pride ourselves on the strength of our product all the way through the aircraft."

Despite Etihad's rapid growth, Hogan acknowledges challenges. "Rising oil prices have had a dramatic effect on everyone, and we are not exempt," he says, but adds that Etihad's young fleet (planes are on average just 2.4 years old) means better fuel efficiency.
           
Hogan says that while rapid growth in the Middle East has served Etihad well, it also means increased competition from both upstarts and established airlines looking to expand to Abu Dhabi and other markets. "We'll capitalize on our early entry into the region by growing our routes while these other airlines come in a step behind," he says.

According to Hogan, managing Etihad's phenomenal growth has also been a challenge. "Ensuring that our rapid expansion is executed without compromising our quality product and excellent service is not always easy," he says. "It comes down to tremendous hard work and commitment from across the organization. Everyone here is focused on delivering excellence."