CASE STUDY

Innovation at Etihad
Airways


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Abstract
This paper is a mini case study presented on the innovation strategies and innovative
products/services at Etihad Airways. For the purpose of this paper, primary and secondary
research was undertaken to establish facts- and relevance of the primary data was created with
the help of secondary data. For the purpose of primary data, an interview was conducted with
Mr. Ghaith Matar, the head of marketing department at Etihad Airways Abu Dhabi, to learn
about the innovations at his company, and the strategies used to follow suit. Throughout the
paper, secondary data has been used to validate information acquired from the point of
contact, and this information was taken from a variety of sources including newspaper articles,
company website, etc. Through the end of the case study, recommendations were offered to
the company in the light of the information gathered generally and academically.

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Contents
Company Description ..................................................................................................................... 2
Innovation at Etihad Airways ......................................................................................................... 5
In flight/ Cabin Innovations ........................................................................................................ 6
Recommendations ........................................................................................................................... 7
Appendices ...................................................................................................................................... 9
Bibliography ................................................................................................................................. 13


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Company Description
Etihad Airways is a renowned name in the global aviation industry and is the national carrier of
the United Arab Emirates. Etihad Airways is headquartered at Abu Dhabi and was incorporated
in 2003 by the orders of the royal ruler of the nation and has a fleet size of 104 (Etihad Airways,
2014). The airline started operations in 2003 and in 2013 it had revenue of approximately US
$6.1 million. Today, Etihad is one of the fastest growing airlines of the world and most of this
success can be dedicated to the immensely successful marketing and innovation Etihad Airways
has conducted and experienced over the years. Etihad operates through narrow and wide
bodied Airbus & Boeing aircrafts and has a fast growing network in Middle East, Asia, Europe,
North America, Canada & Australia (CAPA, 2014).
Etihad is governed by a board of directors chaired by HH Sheikh Hamed bin Zayed Al Nahyan.
The vice chairman at Etihad is Mr. HH Sheikh Khaled bin Zayed Al Nahyan. The Board consists of
seven independent non-executive members and has two sub-committees, being an Executive
Committee and an Audit Committee, each with its own charter and chairman.
The airline is led by James Hogan (formerly CEO of Gulf Air) who was appointed as President
and Chief Executive Officer on 10 September 2006.

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Innovation at Etihad Airways
According to the interviewee Mr. Ghaith Matar, the head of marketing department at Etihad
Airways Abu Dhabi, the chief and foremost philosophy of Etihad Airways is to perfectly reflect
the Arabian hospitality, culture and generosity through its global operations. Moreover, Etihad
Airways chief corporate philosophy is to become a bridge of hospitality between the East and
West. Ghaith Matar stated that the mission of Etihad Airline is simply to become the number
one airline carrier of this world while the goal of Etihad airways is to be a truly 21st century,
global airline, challenging and changing the established conventions of airline hospitality.
However, Ghaith Matar also believes that the company does not follow other airlines in
adopting all these polices; instead it focuses on internal innovation to lead the industry in
introducing innovative hospitality services. Etihad Airways innovates to lead the airline industry
globally.
Keeping this description of innovation at Etihad in mind, the table in Appendix 1 identifies
Etihad as a Technology Driver, which makes the company a first mover in innovation, and
translates into excessive R&D investment. According to Mr. Ghaith Matar, Etihad Airways has a
very active Research & Development Department and the company spends far more than its
direct competitors in innovative developments and research projects.

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Being a Technology Driver is the reason why Etihad airways won the board service innovation
awards in 2012 and 2013 (Etihad, 2013). Mr. Matar stated that The Company also has policies
to hone and promote internal innovation unlike many of the companies operating in UAE.
Undoubtedly, Etihad is one company that is innovating above par of western companies.
When questioned about innovative products or services at Etihad, Mr. Ghaith Matar stated that
although innovative services and products at Etihad are plenty including culinary innovations,
Human Resource Innovations and Customer Service Innovations, the most recent development
has been the In-flight or Cabin design innovation.
In flight/ Cabin Innovations
In 2008, Etihad decided to lead the aviation industry by offering an innovative cabin design by
partnering with designing agencies from around the world (Factory Design Official, 2014).
According to Mr. Ghaith Matar, the strategy adopted by Etihad was the Strategic Alliance for
the purpose of this innovation, although generally the company primarily depends on Internal
R&D Spending (Refer to Appendix 2).
The vision of the company to be the Best Airline in the World was followed through an
innovative route, and Etihad decided to bring something unique and innovative to the table.
Thus, after careful consideration, Etihad decided that a single designing company cannot help
the organization achieve its goal of innovative design, and therefore three agencies, including
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Honour Branding, Factory Design, and Acumen Design were combined together, and were
called the EDC- Etihad Design Consortium (Factory Design Official, 2014).
On 8
th
of May 2014, Etihad Airways showcased its new and innovative cabin design for the first
time at the Arabian Travel Market, Dubai (ETB News, 2014). The designs were for the airlines
premium cabins for the Airbus A380 and Boeing B787 Dreamliner aircrafts. However, the main
attraction of the evening was The Residence by Etihad (Appendix 3). This was a private cabin
with three rooms, and offered facilities such as a living room, a shower room, and a double
bedroom (ETB News, 2014).
Mr. Ghaith Matar as a marketing head believes that this innovation was taken very positively by
business class and elite flyers and has served as a unique selling point for the company ever
since.
Recommendations
Although in terms of innovation, Etihad Airways easily outdoes most of its competitors, there
are some areas that the company has neglected over the years, which limit the usefulness of its
innovation programs. Firstly, Etihad has a significantly smaller reach as compared to rivals such
as Qatar Airlines. While the latter serves 125 destinations, Etihad Airways is still lagging behind
with approximately 100 destinations (ETN- Global Travel Industry News, 2013). This means that
although the company is investing a lot more in innovation as compared to other airlines, it is
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limiting itself in terms of the market share and the market segment that it is serving. Thus, the
complete benefits of investment in innovation can only be exploited when the adopters of
innovation increase.
Furthermore, general reviews on the internet about Etihad Airways reflect highly negative
customer sentiments about the company. It is seen that the reviews mostly complain about bad
customer service. Thus, although Etihad Airways is trying to innovate and serve the passengers
in the best possible ways, it needs to start by changing the brand perception through effective
marketing techniques. This will ensure that the customers develop the right kind of confidence
to try the new and innovative services that Etihad is heavily spending on.


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Appendices
Appendix 1


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Appendix 2


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Appendix 3

The Residence lounge room (Source: Acumen Design Associates, 2014)
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The Residence double bedroom (Source: Acumen Design Associates, 2014)

The unique curved aisle of the B787 First Suites cabin (Source: Acumen Design Associates, 2014)
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Bibliography
Acumen Design Associates, 2014. Acumen Design Associates | Transport and Product Design
Consultancy | London UK | Etihad Airways unveil the most luxurious living spaces in the
history of commercial aviation. [Online] Acumen Available at: https://acumen-
da.com/news-item/etihad/ [Accessed 5 July 2014].
CAPA, 2014. CAPA Centre for Aviation: Etihad. [Online] Available at:
http://centreforaviation.com/profiles/airlines/etihad-airways-ey [Accessed 15 May
2014].
ETB News, 2014. Etihad Airways ATM Stand Displays World-Leading Innovation At Arabian
Travel Market. [Online] Available at: http://australia.etbnews.com/204265/etihad-
airways-atm-stand-displays-world-leading-innovation-arabian-travel-market/ [Accessed
5 July 2014].
Etihad Airways, 2012. Etihad Airways wins on board service innovation award. [Online]
Available at: http://www.aviation.ca/2012112914021/news/international/uae/14021-
etihad-airways-wins-on-board-service-innovation-award [Accessed 5 July 2014].
Etihad Airways, 2014. About Us. [Online] Available at: http://www.etihad.com/en-pk/about-
us/our-story/ [Accessed 22 May 2014].
Etihad Airways, 2014. Etihad Guest. [Online] Available at:
http://www.etihadairways.com/sites/etihad/global/en/guestrecognition/visitor/etihadg
uest/partnerdetails/pages/one2one.aspx [Accessed 5 July 2014].
Etihad, 2013. Etihad Airways wins onboard service innovation award. [Online] Available at:
http://www.aviation.ca/2012112914021/news/international/uae/14021-etihad-
airways-wins-on-board-service-innovation-award [Accessed 4 July 2014].
ETN- Global Travel Industry News, 2013. Etihad Airways will add 8 more destinations in 2014.
[Online] Available at: http://www.eturbonews.com/40794/etihad-airways-will-add-8-
more-destinations-2014 [Accessed 5 July 2014].
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Factory Design Official, 2014. Factory Design Official. [Online] Available at:
http://factorydesign.co.uk/etihad-airways-a380-cabin-interior-design/ [Accessed 5 July
2014].