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Etihad Airlines’ Products, Market and Expansion Report

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Updated: Jul 26th, 2021

Introduction

Etihad Airways is an Abu Dhabi based airline company that was founded in 2003 under a royal decree. The airline has a fleet of over 100 aircrafts and flies to over 120 destinations across the world. This firm plays an important role in boosting the economy of this country. According to the statistics given by Bamber, Hoffer, Kochan, and Nordenflycht (2014), Etihad Airlines made a profit of over half a billion dollars in 2009 from its operations. This is a massive contribution to the growth of this country’s economy. At this stage, it is important to analyze the operations of this firm in order to determine its ability to manage the market forces.

Products

Etihad Airline is an airline company that offers travel services. It offers a range of travel products based on the needs and capacities of its clients. It has the economy and business class as some of the main products in the market. However, sometimes it also offers chartered services when the government or private entities make requests. Each of its products is designed to make unique needs of its customers in the market. According to Bamber, Hoffer, Kochan, and Nordenflycht (2014), Etihad Airline also offers cargo services to some selected markets. Cargo services are specially designed to meet the needs of merchants who engage in importation and exportation of various products from one part of the world to the other.

Market Segments

According to Jha (2013), segmentation is an important marketing activity that helps a business entity to profile its customers in order to help in designing the products that can serve them better. For Etihad Airways, market segmentation is always done based on the income of the targeted customers. The first target group, which accounts for over 65% of the company’s regular customers, is the middle class. These regular travelers have no cheaper alternatives other than to use the services of the airline companies. They are very sensitive to the pricing strategy that a given airline uses, and this makes it necessary to charge lower prices in order to meet their purchasing capabilities. They always use the economy class. The lower upper class forms another important segment. Inasmuch as they are conscious of the of the prices charged by the airlines, they want a little touch of class in the products they use. These people are willing to pay an extra fee for extra comfort when travelling. The last segment that Etihad has not paid close attention to is the upper uppers. These very rich individuals probably own their personal jet. They would come to hire planes from this company. They are not very regular, and this makes them an unattractive market segment.

Target Market

Etihad Airline had the Middle East as its main target market when it was starting its operations. However, the firm has grown very first over the past few years. Currently, the firm targets the market in North and South America, Europe, Asia-Pacific, and parts of Africa. With over 120 destinations in 54 countries, the firm has experienced a massive increase in its market share. According to the report by Bamber, Hoffer, Kochan, and Nordenflycht (2014), the firm has plans to focus on a new target markets in emerging economies. For instance, there has been a renewed focus to target the Nigerian market with new products. The Nigerian market is particularly lucrative because of the large population and the rising number of middle class population. The economy is currently the largest in Africa. A special focus is also given to the Indian and Brazilian markets, which also have massive population and impressive economic growth. As many other airlines across the world, Etihad Airways is increasing its focus on the middle class who form the largest market segment in this industry.

Expansion Possibilities

Etihad Airways has been facing stiff competition in its current market. Jha (2013) says that in the current competitive market, firms are forced to look for overseas market in order to manage the raging competition. Etihad Airlines has realized that it can only achieve success in this industry if it expands its operations. That explains why the firm expanded the size of its fleet from 78 fleets in 2009 to about 102 fleets in 2013. The firm is planning further expansion on the size of its fleet in order to sustain its expansion plans to other global destinations. In order to sustain the competition posed by regional and international airline companies, this firm will need to increase its planes and employees.

Conclusion

Etihad Airlines is one of the fastest growing airline companies in the Middle East. The firm has experienced massive success in the local and regional market, and this motivated its management to move to the global market. Despite the challenges it is facing in the global markets, the firm has been making impressive advancement in this industry. Its success has played a major role in enhancing the growth of the Emirati Economy.

References

Bamber, G., Hoffer, G., Kochan, T. & Nordenflycht, A. (2014). Up In the Air: How Airlines Can Improve Performance by Engaging Their Employees. New York. Cengage.

Jha, A. K. (2013). Institutions, Performance, and the Financing of Infrastructure Services in the Caribbean. Washington, D.C: World Bank.

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