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Etihad vs Emirates

Emirates, EtihadSimply put, Emirates aims to become the world’s biggest airline: the Dubai government-owned company, established in 1985, entered the ranks of the world’s top ten carriers in 2005 and now serves 93 destinations in 59 countries. In 20 years, the Emirates Group became a major travel and tourism conglomerate, including an international cargo division, a destination and leisure management division, an international ground handler and an airline IT developer, but passenger carrying remains the group’s core business, and a profitable one too: 2007 marks the airline’s 19th straight year of profits, which have increased by 23.5 percent to reach $942 million in 2007. With total orders soaring at $30 billion for 97 more aircrafts, Emirates will own 151 heavy carriers by 2012, with a capacity to carry 33 million passengers.

But it is not the only game in town. Since 2003, when the Government of Abu Dhabi launched its own Etihad Airways, Emirates’ position’s been threatened. The dynamic newcomer says it doesn’t plan to become the biggest but the best, and has impressive ambitions of its own: already serving 45 worldwide destinations with 31 aircrafts, Etihad has introduced 15 new heavy carriers in just a year and is planning to get 10 more for a $8.9 billion worth order. Etihad posted a 70 international destinations objective for 2010, while also developing its own cargo and travel segments.

Product Emirates and Etihad both claim to have come up with an innovative approach of traveling, setting new international standards for luxury travel. Both company’s offers are based on heightened quality service on all flight classes: economy class providing a 32 inches seat pitch, business class enjoying gourmet meals served on quality china (in March 2007, Emirates even opened a catering facility dedicated to the production of airline meals), extensive wine lists, electrically operated massage, etc. So it’s in additional details that each tries to make a difference: for Etihad, being awarded the World’s Leading Flatbed Seat at the 13th World Travel Awards in 2006 or the best economy class food in the world (according to a global survey by Skytrax), or even opening its own $68 million Aviation Academy. These are competitive assets against Emirates that, thanks to attention to service such as ceiling display of the Dubai night sky or in-flight mobile phone use, has been voted top airline in the regional travel customer satisfaction TravelMonitor study in February 2007.

The sky is the limit with regards to creative servicing: Emirates introduced the ‘Good Morning London’ service for first and business class travelers who like to shower, change and rest after an overnight flight to London, and extended to and from many European airports a complimentary chauffeur service (by water in Venice!). The Dubai airline offers first class passengers fully-flat beds, mini-bars and gourmet meals (including caviar and champagnes such as Dom Perignon), as well as over 600 channels of entertainment.

Etihad’s business and first class arriving or departing from London are entitled to a luxury limousine transfer service that Etihad, twice voted the world’s leading new airline, has provided for two years within the UAE; first class ‘Diamond Guests’ are accompanied by a ground concierge; each seat becomes a 80 inches flat bed.

Promotion These two love sponsoring sport, especially football and Formula 1 that provides worldwide visibility and technological proximity with the airline realm: Emirates signed an outstanding eight year and $195 million deal with FIFA, with famous football clubs (PSG, Hamburg and Arsenal), and Formula 1 with the McLaren team. Formula 1 is also in fashion for Etihad that partnered up for three years and for an annually $14 million investment with racing team Skyper, with the Chelsea Football Club and with English rugby union team Harlequins. But while Emirates has long been working with eleven ad agencies worldwide, even installing a virtual platform in order to accelerate the work process, Etihad has been quite shy on advertising, launching its first commercial as late as May 2007. The Abu-Dhabi carrier chose to rather focus on brand building based on one simple concept: passengers are not clients, they are guests. First class became Diamond, Business class is Pearl and Economy class is Coral. Even its cargo activities are gloriously labeled ‘Crystal’.

Positioning To government owned UAE airlines, one key issue is to get an increasing numbers of business and leisure travelers to visit the region. Another is to benefit from the continuous market growth in Asia and the Far East and therefore become main carriers between the East and the West. In the financial year 2006/2007, Emirates carried 17.5 million passengers among which 68 percent to Asia (it’s the first foreign airline in India) and 32 percent to Europe. It also attracted 5 percent of total traffic on the Europe-Australia ‘kangaroo route’.

Etihad expects to exceed its target of 4.5 million passengers by the end of this year; key routes such as London Heathrow, new Dublin service, Manila and Toronto achieved record passenger numbers with more than 85 per cent seat factors. Both airlines are also dragging attention by opening new direct long haul routes: Etihad to South Africa, Emirates to South America. But while Emirates is getting bigger in terms of long body aircrafts, Etihad is enlarging its narrow body fleet and increasing the frequency of its flights on already served destinations with 258 weekly rotations, thus offering a dense regional flights network.

Place E-ticketing services are the new thing in ticket sales. Tour-operators now represent less than 7 percent of Emirates ticket sales against 17 percent for net-operators. Etihad, that introduced e-ticketing in July 2006, now offers this service on 90 percent of the airline’s international network. Emirates chose to never be part of an alliance but has code share agreements with 12 airlines while the Abu-Dhabi flag company signed an interline agreement with 18 international carriers which allows passengers to book and fly with Etihad and the partner airlines using one e-ticket.

Pricing It may be difficult to differentiate Etihad and Emirates with regards to service, but the Abu-Dhabi airline has a better reputation for value. Emirates has been rated the most expensive Gulf airline. Emirates, which since last April incorporates fuel surcharges into its published airfares rather than charging them separately (which drew criticism from consumer groups), unabashedly defends the fact that a very good product justifies to seek to retain pricing at the highest possible level, while Etihad claims to align its prices to major companies.

A direct flight in economy from the UAE to London will cost $700 with Emirates and $490 with Etihad; similarly, a trip on business class from the UAE to Singapore is fared at $2,824 with one stop on Emirates while the non stop ticket costs $2001 with Etihad.


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