• Order
  • Offers
  • Support
    • Due to unforeseen circumstances, our phone line will be unavailable from 5pm to 9pm GMT on Thursday, 28th March. Please be assured that orders will continue to be processed as usual during this period. For any queries, you can still contact us through your customer portal, where our team will be ready to assist you.

      March 28, 2024

  • Sign In

Disclaimer: This work was produced by one of our academic writers to help university students with their studies.

Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com.

Etihad SWOT Analysis

Info: 1931 words (8 pages) SWOT Example
Published: 2nd Nov 2020

Reference this

Strengths

A unique strength that rival airlines located outside the Gulf region cannot imitate is Etihad's favourable location: the majority of the population could be reached from Abu Dhabi International airport within 10 hours, which made the region an excellent transfer destination for travellers covering large distances (Mayerowitz, 2013). Etihad has been renowned for its exceptional service quality and has received numerous awards recognising its high-quality in-flight service (Etihad is a Skytrax certified five-star airline) (Etihad, 2017a). Etihad has been financially stable in the last couple of years, reporting a gradually increasing profit (in 2016, Etihad disclosed a 41% increase in its profit from the previous year), which demonstrates the airline's ability to exploit opportunities in its external environment (Haider, 2017). The airline operates the second largest fleet in the UAE: as of 2017, Etihad operated 128 aircraft with an order backlog of 182 aircraft to be delivered over the course of the next ten years (Etihad, 2017b). Etihad maintains minority shareholdings in other airlines as well and has an extensive code-sharing network (Etihad, 2015).

Weaknesses

Ever since its establishment, Etihad has been able to produce growth each year, however, there are certain strategic weaknesses that started to manifest recently. In contrast to other airlines joining alliances to collaborate and to improve their load factors, Etihad decided to purchase stakes in other airlines to grow its route network (Ft.com, 2016). A lot of financial resources have been spent on acquiring stakes in other airlines (Such as Air Seychelles, Air Serbia, Alitalia), however, these airlines' financial performance is concerning (especially that of Alitalia) (Ft.com, 2016). So far, none of the acquisitions carried out by Etihad was a commercial success, often hindered by the legal disputes (covert attempts on behalf of European legacy airlines to protect their market shares) (The National, 2016).

Opportunities

An ongoing opportunity for Etihad is to focus on emerging markets – this is not to say that capacity should be withdrawn from mature markets, however, if Etihad intends to maintain its current growth rate, focusing on high-potential markets is recommended (PWC, 2015). To overcome the legal difficulties in European markets, it might be worthwhile to investigate the legal options available to establish a subsidiary European airline. The case of Easyjet is by no means similar to that of Etihad, yet there is an interesting strategic move Easyjet has implemented, that might be suitable for Etihad as well (as long as the airline's European routes are concerned). Easyjet, to isolate itself from the uncertainty of the post-Brexit UK air travel industry, decided to establish a European subsidiary to maintain the airline's EU operations (Topham and Sweney, 2017). This could be a viable alternative for Etihad as well to secure its legal position in EU markets.

Threats

Etihad's involvement in acquiring stakes in other airlines as a method to expand its route network might cause further troubles for Etihad airlines' if European courts rule against Etihad's code share agreements (this threat is generally applicable to other Gulf airlines as well). Hence, the legal uncertainty that is present in Etihad's US and EU markets is a topical issue that could rapidly influence the airline's presence in these markets. On the top of the problems experienced in western markets, there is a growing threat coming from the growth of low-cost long-haul airlines with a much lower cost base than Etihad (Economist.com, 2017). The premium travel segment is expected to remain important for Etihad, yet if radical changes are not implemented to compete with low-cost airlines, Etihad's appeal to cost conscious customers may suffer. Etihad has just recently reported a loss of $1.87bn that forecasts a turbulent time ahead for the airline (Kamel, 2017)

SWOT Analysis Resources

BusinessTeacher.org provide free business resources and online learning tools, perfect for helping students and professionals to develop their knowledge and gain a better understanding of different aspects of business. If you are looking for additional support and resources related to SWOT Analysis, please find more SWOT Analysis resources below:

References

  • Accenture (2017). Digital Technology for the Airlines - Accenture. [online] Accenture.com. Available at: https://www.accenture.com/ca-en/insight-perspectives-travel-digital-horizons-robert-zippel [Accessed 25 Jul. 2017].
  • Bhaskara, V. (2017). Analysis: Middle Eastern Airline Giants Cut Back US Service In the Age of Trump - Airways Magazine. [online] Airways Magazine. Available at: https://airwaysmag.com/airlines/analysis-middle-eastern-airline-giants-cut-back-us-service-in-the-age-of-trump/ [Accessed 25 Jul. 2017].
  • Bulldog Reporter (2013). Marketing to Millennials: Gen Y Spending to Boom in Coming Years — Are Travel and Tourism Companies Ready? New Research Suggests How Companies Can Earn a Generation's Business and Loyalty Now | Bulldog Reporter. [online] Available at: https://www.bulldogreporter.com/marketing-millennials-gen-y-spending-boom-coming-years-are-travel-and-tourism-compa/ [Accessed 25 Jul. 2017].
  • Economist.com. (2017). The Middle East's once fast-expanding airlines are coming under pressure. [online] Available at: https://www.economist.com/blogs/gulliver/2017/03/narrowing-gulf [Accessed 25 Jul. 2017].
  • Etihad (2015). Etihad Airways Partners - Etihad Airways. [online] Etihad Global. Available at: http://www.etihad.com/en-us/about-us/our-equity-partners/ [Accessed 25 Jul. 2017].
  • Etihad (2017a). Etihad Airways awarded best first class and best long haul airline Middle-East and Africa. [online] Etihad Global. Available at: http://www.etihad.com/en-us/about-us/etihad-news/archive/2016/etihad-airways-awarded-best-first-class-and-best-long-haul-airline-middle-east-and-africa/ [Accessed 25 Jul. 2017].
  • Etihad (2017b). Our fleet - Etihad Airways. [online] Etihad Global. Available at: http://www.etihad.com/en-us/about-us/corporate-profile/our-fleet/ [Accessed 25 Jul. 2017].
  • Forbes (2016). What Are The Factors Behind Soaring Air Travel Growth?. [online] Forbes.com. Available at: https://www.forbes.com/sites/greatspeculations/2016/08/30/what-are-the-factors-behind-soaring-air-travel-growth/ [Accessed 25 Jul. 2017].
  • Ft.com. (2016). Etihad strategy flies into difficulties. [online] Available at: https://www.ft.com/content/43179318-d1aa-11e5-92a1-c5e23ef99c77 [Accessed 25 Jul. 2017].
  • Haider, H. (2017). Etihad's profit soars 41%. [online] Khaleejtimes.com. Available at: http://www.khaleejtimes.com/business/aviation/etihads-profit-soars-41 [Accessed 25 Jul. 2017].
  • IATA (2017). IATA -Another Strong Year for Air Travel Demand in 2016. [online] Iata.org. Available at: http://www.iata.org/pressroom/pr/Pages/2017-02-02-01.aspx [Accessed 25 Jul. 2017].
  • Kamel, M. (2017). Etihad Has $1.87 Billion Loss in Worst Blow to Gulf Carriers. [online] Bloomberg.com. Available at: https://www.bloomberg.com/news/articles/2017-07-27/etihad-posts-1-87-billion-loss-in-worst-blow-for-gulf-carriers [Accessed 29 Jul. 2017].
  • Kamel, M. and El-Din, M. (2017). Etihad Ducks Trump Clash With Pledge Not to Add U.S. Routes. [online] Bloomberg.com. Available at: https://www.bloomberg.com/news/articles/2017-02-01/etihad-heads-off-trump-tensions-with-pledge-not-to-grow-in-u-s [Accessed 25 Jul. 2017].
  • Machado, A. (2014). How Millennials Are Changing Travel. [online] The Atlantic. Available at: https://www.theatlantic.com/international/archive/2014/06/how-millennials-are-changing-international-travel/373007/ [Accessed 25 Jul. 2017].
  • Martin, R. (2016). Here's how commercial jets will slash their carbon emissions. [online] MIT Technology Review. Available at: https://www.technologyreview.com/s/601008/the-race-for-the-ultra-efficient-jet-engine-of-the-future/ [Accessed 25 Jul. 2017].
  • Mayerowitz, S. (2013). The rise of Middle East aviation hubs is a feat of geography. [online] Skift. Available at: https://skift.com/2013/03/04/the-rise-of-middle-east-aviation-hubs-is-a-feat-of-geography/ [Accessed 25 Jul. 2017].
  • NASA (2017). NASA study confirms biofuels reduce jet engine pollution. [online] Climate.nasa.gov. Available at: https://climate.nasa.gov/news/2580/nasa-study-confirms-biofuels-reduce-jet-engine-pollution/ [Accessed 25 Jul. 2017].
  • Ostrower, Z. (2017). American airlines want Trump to take on their Gulf rivals. [online] CNNMoney. Available at: http://money.cnn.com/2017/02/07/investing/airlines-american-gulf-carriers-trump// [Accessed 25 Jul. 2017].
  • Peters, B. (2017). What The New Travel Ban Means For Airlines, Travel Demand. [online] Investor's Business Daily. Available at: http://www.investors.com/news/trumps-travel-ban-could-implicate-far-more-than-six-nations/ [Accessed 25 Jul. 2017].
  • PWC (2015). 2015 Aviation Trends. [online] Strategyand.pwc.com. Available at: https://www.strategyand.pwc.com/trends/2015-aviation-trends [Accessed 25 Jul. 2017].
  • Reuters. (2016). Air travel demand slows as airlines confront security, fragile economies. [online] Available at: http://www.reuters.com/article/airlines-iata-idUSL8N18R23U [Accessed 25 Jul. 2017].
  • The National. (2016). Etihad launches legal action on airberlin codesharing. [online] Available at: https://www.thenational.ae/business/etihad-launches-legal-action-on-airberlin-codesharing-1.205209 [Accessed 25 Jul. 2017].
  • Topham, G. and Sweney, M. (2017). EasyJet to set up Austrian HQ to operate EU flights after Brexit. [online] the Guardian. Available at: https://www.theguardian.com/business/2017/jul/14/easyjet-austria-eu-flights-brexit [Accessed 25 Jul. 2017].
  • Vidal, J. (2016). Can the aviation industry finally clean up its emissions?. [online] the Guardian. Available at: https://www.theguardian.com/environment/2016/sep/27/can-the-aviation-industry-finally-clean-up-its-emissions [Accessed 25 Jul. 2017].
  • Walker, K. (2017). Uncertain Times: The global airline industry's 2017 watch points. [online] Atwonline.com. Available at: http://atwonline.com/blog/uncertain-times-global-airline-industry-s-2017-watch-points [Accessed 25 Jul. 2017].
  • Wichter, Z. (2017). Too Hot to Fly? Climate Change May Take a Toll on Air Travel. [online] Nytimes.com. Available at: https://www.nytimes.com/2017/06/20/business/flying-climate-change.html?mcubz=2 [Accessed 25 Jul. 2017].
  • Zhang, B. (2016). A nasty rivalry between US and Middle Eastern airlines has been all for naught. [online] Nordic.businessinsider.com. Available at: http://nordic.businessinsider.com/open-skies-american-delta-united-etihad-qatar-emirates-2016-6/ [Accessed 25 Jul. 2017].

Cite This Work

To export a reference to this article please select a referencing stye below:

Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.

Related Services

View all