A Business Environment Analysis: Opportunities for Etihad Airways

This report provides a business environment analysis of Etihad Airways, focusing on opportunities and threats in the coming five years. It highlights the shift in air traffic from Western to Eastern hubs, with Gulf countries playing a significant role. Etihad Airways, being one of the major operational airlines in the Middle East, can capitalize on this trend by launching connecting flights between China and the Western world via the Gulf. However, competition from established players like Dubai Airlines and Turkish Airlines, especially during lean seasons, poses a threat. The report suggests that while new entrants face high barriers, existing players will likely compete fiercely, impacting Etihad Airways' expansion plans. The analysis references industry experts and academic sources to support its findings.

Running Head: OPPORTUNITIES FOR ETIHAD AIRWAYS IN COMING FIVE YEARS
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Running Head: OPPORTUNITIES FOR ETIHAD AIRWAYS IN COMING FIVE YEARS
Question
Business environment analysis of Etihad Airways for coming five years
Carriers like Etihad airways are mostly catering to the air traffic which flows from the eastern
world to the western world. In the last ten years, Gulf countries and the eastern world have
invested heavily in the development of the aviation sector in their countries. This increase in
the aviation infrastructure in the eastern world is giving rise to many new corridors that can
connect the western world with the eastern world. This connectivity is creating a demand for
itself where new traffic patterns are emerging and a new corridor for freight and passenger
transportation is flourishing (O'Connell, 2016).
Almost a decade ago the connectivity between the western world and the eastern world was
dependent on the availability of certain ports in European countries (Widmann, 2015). These
countries were also acting as a hub between the eastern countries and rest of the world in that
region. Now with a developed infrastructure, a new trend is emerging. Here the Gulf
countries are also playing the role of a hub for the passengers coming from Indian sub-
continent and China. This trend may benefit Etihad Airways because they can launch
connecting flights from China to the Gulf countries and further transport them to the western
world. It is a new route and a corridor where the scope for the expansion is tremendous in the
coming future (KingslayJones, 2013).
Opportunities and Threats
In the last ten years, the transportation hubs of Middle Eastern countries have created a hub
and spoke system for the transit passengers traveling from east to west and west to east. This
hub and scope mechanism has already brought down the traffic of western hubs like France,
UK, and the Netherlands by ten percent. “Etihad Airways” is among the three fully
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Running Head: OPPORTUNITIES FOR ETIHAD AIRWAYS IN COMING FIVE YEARS
operational airlines of the Middle East. They can make the best of this opportunity because
the demand for this route is on a boom and Etihad Airways are placed strongly to meet this
demand.
International transfer gravity of the world is shifting towards the east. Certain players like
Dubai Airlines and Turkish Airlines have a commendable presence in the area. They have a
dense Spoke and hub mechanism supporting their operations. During the lean months, they
can always present a tough competition for Etihad Airways and force them to slow down
their expansion plans in the absence of heavy traffic.
The change in the nature of the competition
The current traffic patterns are supporting a boom for airlines like Etihad Airways because of
the heavy investments made by the government sector. According to the industry experts, no
major changes are going to take place in the market in the coming five years. Etihad Airways
has invested in an area where entry barriers are high. New players cannot make their presence
felt all of a sudden. However, the clash among the existing players during the lean seasons
can create a competition for Etihad Airways (Vergnes, 2017).
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Running Head: OPPORTUNITIES FOR ETIHAD AIRWAYS IN COMING FIVE YEARS
References
KingslayJones, M. (2013). ANALYSIS: Why Etihad's James Hogan is empire building. Flight
Global, Accessed 01-12-18,https://www.flightglobal.com/news/articles/analysis-why-
etihads-james-hogan-is-empire-buildin-391687/.
O'Connell, J. (2016). A study into the hub performance of Emirates, Etihad Airways and
Qatar Airways and. Journal of Air Transportation Managment, Accessed
01-12-18,https://dspace.lib.cranfield.ac.uk/bitstream/handle/1826/11247/
Hub_performance_of_Emirates_Etihad_and_Qatar_Airways-2016.pdf?
sequence=1&isAllowed=y.
Vergnes, M. D. (2017). Impact of Middle East Emerging Carriers on US and EU Legacy
Airlines. Massachusetts Institute of Technology., Accessed 01-12-18, Accessed 01-12-18,
https://dspace.mit.edu/bitstream/handle/1721.1/111244/1003289881-MIT.pdf?
sequence=1.
Widmann, M. (2015). "Competitive Position Analysis of Airlines: Traditional Airlines and
Low-Cost Carriers – Market Development,Trends, and Outlooks based on the European
Market.". University of Barcelona, Accessed 01-12-18,
https://ddd.uab.cat/pub/tesis/2016/hdl_2072_266327/WidmannMarcel_TFMGAa2014_15.
pdf.
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