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Etihad Airways’ Business Model & Digital Platform Essay

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Updated: Jul 26th, 2021

Introduction

Etihad Airways is one of the leading airline companies in the Middle East. The firm commands a sizable global market share in the airline industry, competing favorably with top industry players from Europe, North America, and East Asia. It has registered impressive results in terms of revenues even at a time when other airline companies were recording slowed growth during the global economic recession of 2008. According to Cole (2013), the airline industry is one of the most competitive in the world and it is very delicate in terms of retaining customer loyalty. Airline companies are doing everything possible to not only improve the comfort and safety of passengers but also convenience. To achieve a competitive edge, firms are turning to creativity and innovation as a way of continuously offering high quality to their clients. One area that innovation has created significant change is in communication. Hanna (2016) says that clients need a platform where they can easily communicate with the company’s representative without straining.

Airline companies are currently struggling to come up with platforms that can facilitate clients-firm communication from the time these clients express their interest in using the firm’s services to the post-purchase period in case there is an issue that may need a follow-up. Digital communication has largely been seen as the solution to the challenges that this firm faces in the market. To be on top of the rest in this highly competitive industry, Etihad Airways will need to be a Digital Master. It will need a highly sophisticated communication system that enables it to interact with its clients at any time without any delays. In this analysis, the consultant will look at ways in which this airline company can elevate itself to the level of a Digital Master as a way of making it become more competitive in the market.

Etihad Airways Business Model

Snap-chat Business Model

Snap-chat Business Model

Key

  1. Users register in a snap-chart application
  2. Users share moments photos and videos between each other
  3. User information download in the data center
  4. Designers and developers volunteer to design the logos and enhance filters
  5. Investors invest in snap-chat
  6. Customers contact the snap team to design for the filters
  7. Transaction by customers sent through banks
  8. Snap-chat has partners that release the latest news through snap-chat like CNN, National Geographic, people, and food network.
  9. Snap-chart create a specific filter for the users to encourage using snap-chart
  10. Clinics, reality TV, and salons use snap-chat accounts in advertising for their services

It is important to understand that users must have smartphones and internet data for them to use the above system. The system brings together so many stakeholders in a single digital platform where communication flows freely. As shown in the figure above, the data center snap-chat helps in connecting these stakeholders. Customers using Etihad Airways services can easily book hotels, cars, salon services, and much more through this digital platform. They are also capable of making payments to these vendors directly through their bank accounts without having to carry cash or make bank transfers. It makes their journey safer and it gives them full control of every activity they undertake through their journey. Other stakeholders that have partnered with Etihad Airways also get to benefit from these services. They get to advertise their services to travelers through the digital platform offered by this airline.

Etihad Airways Unification Business Operating Model

Unification Business Operating Model
Figure 2: Unification Business Operating Model

The unification business operating model above shows how the operations of this firm can be integrated to achieve greater efficiency. As shown in the figure above, every single activity, from ticketing, to travel experience, customer management, communication devices integration, loyalty issues, maintenance services, and after-purchase services offered to the clients are controlled from a central database. It makes it easy to access data for clients, suppliers, partners, and all other relevant stakeholders. The highly sophisticated database above allows clients of Etihad Airways to conduct numerous transactions in the online platform.

Etihad Airways’ Resources

According to Uhl and Gollenia (2014), one of the most important resources at Etihad Airways is its highly trained human resource. The firm has a team of highly skilled employees capable of speaking a number of languages. This is important for an airline company that is operating on a global platform where most of its clients speak different languages. The management is also dynamic and committed to achieving success in the market. The company has also purchased some of the latest models of jets to ensure that it is capable of meeting the needs of its clients. The airline has fitted its planes with state-of-the-art entertainment equipment to ensure that its clients remain entertained at all times. The firm also prides itself with a wealth of experience earned from its many years of operating in this industry.

Transaction Information Flow

In this digital platform, the aim is to come up with an effective transactional system that will enable the clients to get services they need in the online platform. In this paper, the researcher will look at two important transactions important for clients, which are flight transactions and hotel bookings.

Flight

According to Bones and Hammersley (2015), clients often face a serious problem trying to make important transactions in relation to flight-related activities. Through its digital platform, the following online transactions can be made by clients online irrespective of their physical locations.

Online booking of ticket

In the past, clients had to visit designated physical locations to get their flight tickets. However, through the use of its digital platform, clients can now book for their tickets and make online payments without having to go to the physical offices of this firm.

Online confirmation of travel details

Once a client has purchased a plane ticket, it may be necessary to make regular check-ups in case there are any changes or updates in relation to the dates and times of travel. It eliminates cases where travelers go to the airport only to be informed that their flight has been rescheduled. Clients can also request changes in their travel dates through the online platform in case that is necessary.

Online booking of cars

When visiting a new city, one of the main issues that travelers are often concerned with is finding taxis that can safely take them to their desired locations. The airline company can help its travelers rent cars or get taxis as soon as they land at the airport. These cars can be paid for online to reduce the need to carry cash.

Hotel services

Travelers are often concerned about getting good hotels where they can stay while they are on their trip. Etihad Airways has created a business relationship with hotels, as shown in the diagram above that allows its customers to get accommodation that meets their needs based on their budget. Travelers get to view these facilities well before they travel so that they can choose those they consider most appropriate. As such, when they land at their airport their drivers take them directly to the hotels they had booked.

Etihad’s Digital and Leadership Capabilities

Below is a diagrammatic representation of Etihad Airways digital and leadership capabilities.

Etihad’s Digital and Leadership Capabilities Position
Figure 3: Etihad’s Digital and Leadership Capabilities Position
  • Overarching digital vision exists, but maybe underdeveloped- Currently, Etihad Airways has a clear digital vision that is yet to be fully developed because of a number of challenges. The firm has already developed an integrated communication system, but implementation is still a challenge that the top leadership of this firm must find a way of addressing.
  • Digital capacity –Etihad Airways has considerable digital capacity in terms of highly trained employees and a flexible leadership that is willing to try new methods to achieve the desired success. Its financial resources also increase its digital capacity.
  • Social mobile –Etihad Airways has come up with a platform that enables its clients to interact in their social media, share their experience, and get advice using hand-held devices such as Smartphone.
  • Digital culture- The management is currently trying to create a digital culture at this company. It is encouraging its clients to use digital services that it offers. The employees are also regularly taken through training to enhance their digital skills.
  • Leadership- To successfully enter the digital age, Etihad must have a leadership that trusts emerging technologies. The top managers at this firm have been at the forefront in introducing and supporting change based on the emerging technologies.

Playbook: How Etihad Airways Can Maintain Their Digital Master

The analysis conducted above shows that Etihad Airways is on its path to becoming a digital master. A number of issues will need to be addressed to help it overcome some of the current challenges that it is facing as it tries to transform itself from a conservative to a digital master. The following table shows the course of action that the management should consider.

Moving from Conservative to Digital Master

Components of becoming a digital master Course of Action
Strong overreaching digital vision The management should come up with a strong overreaching digital vision. The vision should clearly stipulate what should be achieved within a given period.
Good governance To achieve the set vision, it is also important for this firm to embrace good governance. The managers should be ready to embrace change and commit resources that will help in achieving the set goals.
Many digital initiatives generating business value in measurable ways The management will need to come up with digital initiatives that can generate business value. It should take advantage of the digital platform to create business opportunities.
Strong digital culture The firm will have to create a strong digital culture. The top leaders and all the employees must develop positive attitude towards the use of emerging technologies.

List of References

Bones, C & Hammersley, J 2015, Leading digital strategy: Driving business growth through effective e-commerce, Oxford University Press, Oxford.

Cole, A 2013, Analysis of the Etihad Airways, John Wiley & Sons Publishers, Hoboken.

Hanna, N 2016, Mastering digital transformation: Towards a smarter society, economy, city and nation, Cengage, New York.

Uhl, A & Gollenia, L 2014, Digital enterprise transformation: A business-driven approach to leveraging innovative IT, McMillan, London.

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IvyPanda. 2021. "Etihad Airways' Business Model & Digital Platform." July 26, 2021. https://ivypanda.com/essays/etihad-airways-business-model-amp-digital-platform/.

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