Case Study: Evaluating Etihad Airways' Business Environment

This case study examines Etihad Airways, the second-largest airline in the UAE, delving into its background, products, services, and industry position. It provides an overview of the airline's two main divisions, Etihad Holidays and Etihad Cargo, and highlights its commitment to premium services and global expansion. The study analyzes the aviation industry in the UAE, including classifications of airlines, business and combi class services, and the impact of low-cost carriers. Furthermore, it explores macroeconomic factors, government policies, and market trends affecting Etihad Airways, such as inflation, population, and real GDP per capita. The analysis also covers the opportunities and threats facing the company, offering insights into its competitive landscape and strategic challenges. The report concludes with a discussion of the limitations of the study.

Background of the firm
Profile of the company
Etihad Airways is known as the second largest airline in the United Arab Emirates which started to
commence its operations from the year 2003. Etihad is known to be one of the Big 3 airlines which is
based in the Middle East. It is also known to become one of the fastest growing airlines in the
commercial aviation history. The airline deals mostly in the transportation of the passengers and
consist of two divisions which are Etihad Holidays and Etihad cargo. It have also known to receive
many prestigious air travel awards. This particular airways known to have the world’s best first class
product as well as services. Etihad airways is also committed to become the become the best airline
in the world. This Abu Dhabi Based airline is also known to won three titles for the first class services
provided by them.
Products and services
Etihad airways comprise of two divisions which are Etihad holidays and Etihad cargo. Etihad KSF in
product and service is identified as the inflight developments along with ground product offerings.
In the year 2010, Etihad have known to introduce a Japanese inflight service method. In the past
couple of years, Etihad Airways have known to make inflight as well as aircraft developments for
penetrating the far eastern market for serving the customer better. The premium inflight services of
Etihad have also expanded to all the economy class on all flights and routes to the far east
destinations. The economy class includes Panasonic Ex2 IFF system made new trim along with audio
visuals on demand which is enabled in seat. The economy class passengers have the access to free
Wi-Fi at the home airport. Etihad equity alliance is known to be composed of the airlines where
Etihad have minority shareholdings which are Air Serbia, Jet Airways and Virgin Australia
Purpose of the case study
The purpose of the paper is to evaluate the economic as well as the business environment of Etihad
Airways which will provide a wide rage of information on the aviation industry of the UAE. The
financial reports, various news events as well as the reports of the company will be highlighting the
various challenges that the industry faces. The paper will also state the opportunities as well as the
threats faced by the company .
Industry brief
Consumers
Products
The airlines are mainly classified by their routes as well as their schedules. The two major
classification of the airlines are the domestic airlines and the international airlines. Many countries
have known to categorize their airlines through various classes of air carriers which include local
airlines service, international airlines and charter services.
The air charter companies are known to focus mainly on the private aircrafts and air ambulance. The
air charter is known for the business of renting an aircraft as opposed to the individual aircraft seats.
The charter jets include light jets, heavy jets and turbo props

Business class services
The business class travel is known to be available on many commercial airlines in the airline industry
which is known to be an upgraded from the economy class. The business class services are
distinguished from the economy cass travel by the quality of the food srvices, quality of seating and
other amenities. They are also known to provide angled lie flat seats and cradle seats for the
passengers.
Combi carrier services
The combi aircrafts are used for commercial purposes which carries either passengers or cargoes or
might have partition for allowing both uses at the same time. The purpose of this aircrafts are for
maximizing revenues and maintain stabilizing in the market.
Low cost carriers
There are basically ten low cost airlines which is present in the United Arab Emirates. One of them is
Air Arabia which can be stated as the leading air cost carrier in the Middle East. The other airlines
include Flydubai, Jazeera Airways, Onur Air, Nas Air and Bahrain Air. The low fares are designed in
order to stimulate demand. They however also provide one of the best customer services
performance in the peer group.
Full service carrier
This particular kind of carriers can be either domestic, international or regional in nature. The full
service airlines does not charge for amenities such as the booking charges, food and beverages and
baggage.
main players
The authorities of UAE are known to invest $2316billion in the development of the airport and
expansion. The schedules airlines of the United Arab Emirates Air Arabia, Emirates and Etihad
Airways. Air Arabia is the largest low cost airlines which is present in the Middle East whereas
Emirates is the largest airline of the UAE. The aviation is known to account for 27 percent of the
gross domestic product of DubaFlydubai is also one of the low cost carrier of dubai where Emirate is
known to crown as a global hub for both passengers as well as cargo traffic. Dubai International
Airport will be handling more than eighty million passengers by the year. In the year 2017, the
United Arab Emirates are known to lead the passenger growth of the Middle East. The growth of the
middle east passenger have known to rise to more than 6.3 percent. The report of Frost & Sullivan
shows
Industry cost structure
Economies of scale fixed and variable cost
Market structure
Market segmentaion
Trends in demand that affects revenue

The trends will be allowing the traders and investors for capturing profits. There are major factors
which results to long term trends and fluctuations in the short term which are international
transactions, speculation and expectation and supply and demand.
Opportunities and threat
Macroeconomic factors
Inflation
The chart above shows the level of inflation in United Arab Emirates. The consumer prices of h
United Arab Emirates have known to decrease by 2 percent in the recent year. January 2019, have
known to experience the first month of deflation since 2011. The reason behind this is introduction
of the 5 percent value added tax in 2018 dissipates. The price of housing as well as utilities have
known to fall and the same effect prevailed for medical care, food and bevarages and transport. The
average rate of inflation in UAE have been 2.19 percent since 1990.
Population
Real gdp per capita
The gross domestic product of the United Arab Emirates have been 38,257 crores in the year 2017.
The economy of the UAE is the second largest economy in the Middle East.
Government policies
Government regulation
The United Arab Emirates known to rank high in the global competitiveness index and at ease of
doing business. The government usually regulates the market to provide protection to the
individuals as well as to the environment. The government regulations can be either economic or
social in nature.
Conclusion
limitaion