University Assignment: Managing Innovation - Etihad Airways Report

This report provides a comprehensive innovation audit of Etihad Airways, a leading airline based in the UAE. It examines the company's innovation history, from its inception in 2003 to its current strategies. The report highlights Etihad's focus on customer experience, employee engagement, and the adoption of new technologies, such as virtual cabin tours and the iFikra initiative. It analyzes the impact of innovations like "The Residence by Etihad" and the integration of artificial intelligence and robotics. The report also considers the broader aviation industry trends, including the use of VR and AI. The conclusion emphasizes the critical role of technological advancements and customer-centric approaches in Etihad's success and competitive advantage within the UAE market.

Running head: MANAGING INNOVATION
Managing Innovation
Name of the Student
Name of the University
Author note

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Executive Summary
The report has been helpful in analyzing the different kinds of innovative aspects which can be
adopted by the airlines industry present in the market of UAE. The company which has been
researched in the report is Etihad Airlines which have been successful in managing the
innovations for providing better experience to the customers along with the employees present in
the company. The major aim of Etihad Airlines is to stand apart from the other competitor airline
companies through providing the customers with seamless apartment kind of experience during
their travel. Lastly, with the help of the different innovation concepts and model, it can be
concluded that the robotics and the artificial intelligence are the two major aspects which are
being made by the company to improve their growth in the market.

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Table of Contents
Assignment 1...................................................................................................................................3
Introduction......................................................................................................................................3
Purpose of the report & structure.................................................................................................3
The Organization & Industry Overview..........................................................................................3
The Organization and its Innovation History..............................................................................4
The Organizations existing Innovation Performance and Capabilities.......................................5
The Industry in 2019....................................................................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................9

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Assignment 1
Introduction
Purpose of the report & structure
The report throws light in analyzing and conducting an innovation related audit for
Etihad Airways which is situated at United Arab Emirates. The main aim and purpose of the
report is to understand the innovation history along with performance of Etihad Airways in the
past few years along with the performance of the respective airlines industry in the year 2019.
The structure of the report will be including the industry and organization overview, innovation
history of Etihad Airways along with existing performance along with capabilities of Etihad
Airlines till the year 2019. Lastly, the analysis and conclusion of the viewpoints need to be
identified regarding the innovation capabilities of the respective company as well.
The Organization & Industry Overview
Etihad Airways is considered to be the world leading airline which is based at Persian
Gulf, UAE. Etihad is currently known as one of the Big Three Airlines based in the Middle East
and the other two airlines include Qatar Airways and Emirates Airlines (Etihad.com 2020). The
company started to commence their operations in the year 2003 and the parent company is the
Etihad Aviation Group. There are different core values of Etihad Airlines which include the
following:
 Acting in a positive manner in all kinds of situations
 Caring about Detail

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 Taking proper responsibility
 Inspiring the different customers
 Delivering best possible practice
These are the different values which help in covering essential aspects which are
necessary for the success of the company and they like anticipating needs of customers and strive
to be highly consistent in nature.
The aviation or the airline industry of United Arab Emirates has been one of the most up-
to-date destinations for trading, shopping along with travel as well as tourism. These are the
different factors that are influencing the tourism for country are as follows: safety as well as
security, tourism rules and regulations, infrastructure and air and sea transport. The entire airlines
industry earning has been around AED98.6 billion in the fiscal year of 2008 and by 2017; it has
reached to AED170.7 billion. Aviation in the Middle East accounts for more than 20% of the
overall Gross Domestic Product wherein Airlines Industry serves as the complimentary industry
which has a huge share in the GDP (Tidd and Bessant 2018). The fleet is more than 500 aircrafts
along with 250 more to be added in the future as well. The entire airline industry in Middle East
will be going a long way and the share in the economy of country is sure trise.
The Organization and its Innovation History
In case of Etihad Airways, the company has been always innovating and specializing in
the new technologies for providing seamless experience to their customers and managing the
retention of employees thoroughly. The innovative lab helps in supporting along with
accelerating delivery of the promising projects and ideas with streamlined governance, dedicated
resources along with external network of partners (Nambisan et al. 2017). Etihad has been highly

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successful in providing innovative services to both customers and the employees as they feel
these are the crucial asset of the company and they need to be kept satisfied. For instance- The
past innovations of the company include virtual cabin tour for customers wherein they can take
the virtual tour and step in the cabins which are available both in Boeing 787 and airbus A380
(Arabianbusiness.com 2020). On the other hand, in case of employees, Etihad Airways have
been successful in launching iFikra initiative for driving the staff related innovation. Through the
same, it allows the employees to showcase their ideas and promoting intrapreneurship for
addressing ongoing business challenges and untapped opportunities (WTM.com 2020).
The entire Aviation Industry of UAE has been investing in the advancement of the
aviation sector in terms of the using the latest technologies for managing their innovation
prospects in a positive manner (Kogan et al. 2017). In the current scenario, notwithstanding
headwinds which are being posed by cyclical slowdowns across the entire globe and regions, the
national carriers of UAE namely Etihad, Emirates, and Qatar along with new born low cost
carriers such as Air Arabia have been capable of setting their own sights on the turbo-changing
expansion of the global connectivity. It has been helpful for them in coping with the exponential
growth of tourism as well as commerce in the UAE which is the favored destination and global
hub for investors (Forés and Camisón 2016).
The Organizations existing Innovation Performance and Capabilities
In the previous years, it has been noticed that Etihad Airlines which was one of the young
airlines in that span of time launched “The Residence by Etihad” in 2014. It was considered to be
the improved version of First Class Cabin, along with the total innovation in the luxury
commercial flights as well. It was first introduced by Etihad Airlines which is the luxury living
space available only on certain Airbus A380 flights in and out of Dubai (Coccia 2017). It is

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named Residence as it is to be believed that the passengers are residing in an apartment and there
is personalized Butler trained by Savoy. The respective kind of luxury on commercial flight is
unparalleled and Etihad Airlines has been capable of managing for developing luxury products
along with services in a short span of time. After the respective introduction, Etihad Airlines has
become premium on commercial luxury flight in the market (Domínguez-Escrig et al. 2019).
With the help of the Radical Innovation Theory and Approach, Etihad Airways has been
capable of completely disrupting their existing business and create the new business model.
Through providing the customers with residence feeling in Airways, Etihad Airways have been
capable of making the effective that is unparalleled in nature and it is not possible for the other
airlines to implement the same (Berry and Berry 2018). Through Customer Relationship
Management Software, Etihad Airlines have been simultaneously developing SaaS (software as a
service) Model that has been capable of completely transforming the business in the
technological front effectively.
From the respective kind of innovation, it can be analyzed that Etihad Airlines have been
successful in managing different innovations at their workplace that has been directly or
indirectly attracting the different customers in the market against the other competitors which are
present in the market. In addition, Etihad Airways are implementing the different kinds of perks
and value added services to both premium and economy class customers which have been
helpful for them in managing their services in an suitable manner and without much difficulty as
well (Acemoglu et al. 2018).

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The Industry in 2019
In the current scenario of 2019, it has been seen and noticed that entire Airlines Industry
has become and trying to become highly innovative in nature which has been helpful for them in
capturing more than 70% of the market share in the economy. In the last few years, it has been
seen that Robotics has become a common trend and innovation in different airports which are
making the airlines highly effective (Acemoglu et al. 2018). From UAE to Seattle, the world
changing robotics for engaging with the different customers have been in trend and it is capable
of optimizing the efficiency of the company as a whole. The aspect has been in trend due to the
proper usage of the artificial intelligence and machine learning as many of the respective robots
have the proper ability to learn as well as expand their knowledge so that they have the capability
to provide the customers with the seamless experience while they are on board and make them
feel satisfied.
In addition, the artificial intelligence along with immersive experience on-board is the
two key elements which are being innovated in the airlines in 2019. In the year 2019, In-flight
VR has been capable of claiming the fact that the introduction of the motion sickness frees VR
Intelligence entertainment solution is the key element which is helpful for providing the different
customers with the best services and gain competitive advantage over the others present in the
market. These are the different kinds of innovations included in the airlines and in the entire
aviation industry which are making it highly efficient for the customers to receive luxurious and
premium services from the flights which are booked by them and they will be receiving value for
money as well (Acemoglu et al. 2018).

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Conclusion
Therefore, it can be concluded that innovation and the proper adoption of the
technological advancements play a vital and critical role in the Airlines Industry. In case of
Etihad Airlines, the company has been highly successful in the past few years to meet the
different needs of the customers and gain competitive advantage in the market. The Residence
feel experience which has been provided to customers are the result of the artificial intelligence
along with technological improvements which make the company successfully and it implements
the effectiveness in the different services which are delivered by them to the customers
successfully. There are number of airlines present in the UAE market such as Qatar Airways or
Emirates Airlines or Etihad Airlines which are working towards the technological advancements
every year to make the customers feel that they are the top asset of the company. The attention
towards the staff engagement is the other key element which has helped them in improving their
growth prospects successfully.

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References
Acemoglu, D., Akcigit, U., Alp, H., Bloom, N. and Kerr, W., 2018. Innovation, reallocation, and
growth. American Economic Review, 108(11), pp.3450-91.
Acemoglu, D., Akcigit, U., Alp, H., Bloom, N. and Kerr, W., 2018. Innovation, reallocation, and
growth. American Economic Review, 108(11), pp.3450-91.
Arabianbusiness.com 2020 Etihad Airways launches iFikra initiative for Staff Innovation
(online) Retrieved from https://www.arabianbusiness.com/technology/421878-etihad-airways-
launches-ifikra-initiative-to-drive-staff-innovation [Accessed on 12th April 2020]
Berry, F.S. and Berry, W.D., 2018. Innovation and Diusion Models in Policy Research.
In Theories of the policy process (pp. 263-308). Routledge.
Coccia, M., 2017. Sources of technological innovation: Radical and incremental innovation
problem-driven to support competitive advantage of firms. Technology Analysis & Strategic
Management, 29(9), pp.1048-1061.
Domínguez-Escrig, E., Mallén-Broch, F.F., Lapiedra-Alcamí, R. and Chiva-Gómez, R., 2019.
The influence of leaders’ stewardship behavior on innovation success: the mediating effect of
radical innovation. Journal of Business Ethics, 159(3), pp.849-862.
Etihad.com 2020 Etihad Airways- Travel with Peace of Mind When you Fly (Online) Retrieved
from https://www.etihad.com [Accessed on 12th April 2020]

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Forés, B. and Camisón, C., 2016. Does incremental and radical innovation performance depend
on different types of knowledge accumulation capabilities and organizational size?. Journal of
business research, 69(2), pp.831-848.
Kogan, L., Papanikolaou, D., Seru, A. and Stoffman, N., 2017. Technological innovation,
resource allocation, and growth. The Quarterly Journal of Economics, 132(2), pp.665-712.
Nambisan, S., Lyytinen, K., Majchrzak, A. and Song, M., 2017. Digital Innovation Management:
Reinventing innovation management research in a digital world. Mis Quarterly, 41(1).
Tidd, J. and Bessant, J.R., 2018. Managing innovation: integrating technological, market and
organizational change. John Wiley & Sons.
WTM.com 2020 Luxury Brand Innovation in Aviation: The Interesting Case of Etihad Airways
(online) Retrieved from https://news.wtm.com/luxury-brand-innovation-in-aviation-the-
interesting-case-of-etihad-airways/ [Accessed on 12th April 2020]