Etihad ‘won’t become a boutique airline’

It’s conference time again and in an interview yesterday Etihad’s CEO made it very clear the airline faced issues but it wasn’t looking at becoming a boutique airline.

Despite suggestions it could become an Emirates subsidiary that’s unlikely to happen. There are too many competition issues and the implications for international repercussions too serious.

The problem for the five star airline is that it and Emirates compete in a very limited domestic market, with barely 60 miles between their respective main bases, the local populations have huge choice – it’s about the international traveller and the transit traffic.

Etihad made $1.9 billion loss last year and has slashed its freighter fleet, put pilots on unpaid leave and cut routes to Edinburgh in Scotland and Perth in Australia.

It’s trying not to cut more and it’s still determined to maintain its expansion plans.

The issue is though that simply buying more and better aircraft doesn’t guarantee a passenger conquest.

Emirates is sounding and looking like an economy low cost airline when it comes to the cheap seats – succumbing to reality some say, surrendering to mediocrity argue others. Etihad has to find a path of its own, and that’s not going to be easy.

Western travellers are not happy about having little seating choice – many won’t pay business fares but won’t sit in 17.5″ economy seats. Yet Middle Eastern carrier’s see no point in offering premium economy because native and Asian populations don’t get it. Yet only two major European international long hauls don’t have them – KLM and Swiss.

There seems to be no way forward other than the cheaper economy route or the ‘airline of choice’ boutique route. Make good money from fewer quality aircraft with high service levels or become the RyanAir of long haul. Quite where Etihad fits in it doesn’t seem to know.

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