SWOT analysis of Etihad Airways
This concise SWOT analysis of Etihad Airways aims to examine the strengths and the weakness of Etihad Airways. It also aims to explore the opportunities for and the threats to the airline.
Strengths of Etihad Airways
Etihad Airways is the second largest airline of the United Arab Emirates (UAE). It was founded in 2003 by Royal (Emiri) Decree. It is the national airline of the UAE and is wholly owned by the Government of Abu Dhabi (Etihad Airways, 2018).
Etihad has over 120 aircrafts which are from both Airbus and Boeing. The airline flies to over 100 passenger and cargo destinations in 55 countries. It has over 6300 cabin crew representing 110 different nationalities. In 2017, Etihad carried 18.6 million passengers worldwide (Etihad Airways, 2018). It has ownership stakes in a number of partner airlines e.g. Jet Airways, Virgin Australia, Niki, Air Serbia and others (Zhang, 2017).
On-board services play a big role in the success of an airline. In this regard, it is worth mentioning that Etihad is well-known for its outstanding services. It has some great products and services such as Inflight Chef, Food & Beverage Managers and Flying Nannies.
Outstanding products and services have earned Etihad a number of awards over the years. For example, it won the world’s Best First Class Airline award by Skytrax in 2017 (Skytrax, 2018). It has also won the prestigious ‘World’s Leading Airline’ award by World Travel Awards (WTA) a number of times.
Weaknesses of Etihad Airways
Weakness is the second element to address in the SWOT analysis of Etihad Airways. A major weakness of Etihad comes from some of its strategic moves. For instance, Etihad purchased ownership stakes (inorganic growth) in a number of airlines to grow its route; however, this strategy caused it a huge financial loss. In 2016, the airline blamed $808 million of losses on financial exposure to partner airlines such as Air Berlin and Alitalia (Zhang, 2017). Unfortunately, the story did not end there. Both Air Berlin and Alitalia entered into administration causing Etihad a huge amount of financial loss.
Etihad has stopped flying to a number of destinations recently. For example, it announced the termination of flights from Abu Dhabi to Tehran (Iran) in December 2017 (Reuters, 2017). Likewise, it also cancelled its four times a week Entebbe (Uganda) route in March 2018 due to a lack of commercial viability.
Many economy passengers complain that Etihad focuses all of its attention on business class and first class passengers. Many people also complaint that the waiting time in the case of connecting flights is longer compared to other competitors. These issues not only make some passengers unhappy but also invite unnecessary negative word of mouth.
Opportunities for Etihad Airways
Etihad should look for organic and further growth opportunities in the Indian Sub-Continent and Asia. Organic growth usually refers to growth which is achieved through the development of internal resources (BPP, 2010). Etihad can also add depth to the network with increased frequencies on some of the key markets to Cairo, Dammam, Istanbul, Dublin, Dusseldorf, Calicut, Jeddah, Riyadh, Bangalore, Ahmedabad, Manila and others. In fact, some of the markets have already seen increased frequencies.
Threats to Etihad Airways
Threat is the last element in the SWOT analysis of Etihad Airways. Etihad faces two big regional competitors i.e. Emirates Airline and Qatar Airways. Other competitors are British Airways, American Airlines, Air Canada to name but a few in different routes. Threats to the economy class of Etihad come from low cost carriers such as Fly Dubai, Air Arabia, and many others.
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Last update: 01 May 2018
BPP Learning Media (2010) Business Strategy, London: BPP Learning Media Ltd
Etihad Airways (2018) About Us, available at: http://www.etihad.com/en-gb/about-us/ (Accessed 25 April 2018)
Reuters (2017) Abu Dhabi’s Etihad Airways to end Tehran flights in January, available at: https://www.reuters.com/article/etihad-iran-operations/abu-dhabis-etihad-airways-to-end-tehran-flights-in-january-idUSL8N1OJ3BH (Accessed 10 April 2018)
Skytrax (2018) Best First Class Airlines 2017, available at:http://www.worldairlineawards.com/Awards/best_first_class_airlines.html (Accessed 25 April 2018)
Zhang, B. (2017) One of American, Delta, and United’s most feared rivals just suffered a major blow, available at: http://uk.businessinsider.com/etihad-airline-trouble-airberlin-bankrupt-2017-8 (Accessed 25 April 2018)
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Author: M Rahman
M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He is a graduate of both Leeds Metropolitan University and London South Bank University.