Abu Dhabi-based start-up Etihad has ambitious plans to establish itself as a serious player in the Gulf region despite the stiff competition already in place.
Etihad, which started operations at the end of last year, is fully owned by Abu Dhabi's ruling Al Nuhayyan family, headed by Sheikh Zayed, who also have a third share of Gulf Air. The new carrier is seeking a fleet of 50-70 aircraft by the end of the decade.
Etihad will be competing head-to-head not only with Gulf Air but also with the dominant Emirates in neighbouring Dubai. In particular, it will face tough competition on seat-mile costs as Emirates takes delivery of the 550-seat Airbus A380. However, Etihad is positioning itself at the premium end of the market, and aims to compete on frequency.
The carrier is looking at about 40% connecting traffic and believes it can recapture Abu Dhabi's natural market currently taken by Emirates.
Gulf Air, meanwhile, recently launched a low-fare product, Gulf Traveller, also operating out of Abu Dhabi. Sheikh Zayed wants the two carriers to "co-exist", according to Etihad insiders, effectively competing against each other.
Etihad is in talks with both Boeing and Airbus and the carrier's manager network planning, Nik Howarth, estimates that aircraft will come into the fleet at a rate of one a month, with the number of destinations increasing at a similar rate.
The carrier launched late last year and serves London Heathrow, Beirut, Damascus, Amman, Colombo and Bangkok. Services to Mumbai and Delhi in India will be launched later this year and a further 16 destinations are under evaluation.
The carrier is looking to add US services in a couple of years, and is considering Germany and Switzerland as possible European network additions. China is also being studied.
Etihad has started out with two Airbus A330-200s on lease from Brazil's TAM and has recently added an A340-500, also on lease. It is due to add two more A330-200s from US lessor, the CIT Group, and is looking to add four more widebodies by year-end, bringing the total to nine.
In the longer term, the carrier is considering A330-200/300s and the A340-500/600 or Boeing 777-200/300 for a few selected long-haul routes. Finding suitable delivery slots at relatively short notice will be a "key" part of the decision, says the carrier's manager communications and product development Richard Bate.
Howarth says that the large amount of migrant traffic ensures that the UAE can support at least three hub airports.
The fact that there are already two other UAE-based carriers is a potential complication with regard to traffic rights. However, Howarth emphasises that Etihad is making applications in its own right rather than filling in gaps left by Emirates and Gulf Air.
COLIN BAKER LONDON
Source: Airline Business
