Introduction

The paper will look into Etihad Airways, an organization that has evolved in the International

Business and international activities that have contributed to its success. Etihad Airways was

established in the year 2003 as the national flag bearer airline service through Royal Decree

established by Sheikh Khalifa., it main headquarters is in Abu Dhabi the capital city of United

Arab Emirates, currently the airline is believed to have offered transported 1 billion passengers

and goods across the countries it operates from, it has more than 8000 employees working in

various organization departments such as sales and marketing. Most of the organizations'

operations are based in South East Asia, Indian subcontinent, and the Middle East. The

organization makes about 3000 flights on weekly basis in all Middle East destinations in Africa,

Europe, and Asia. It is viewed to be the second best airline service in the United Arab Emirates

and the third best airline service in the Middle East. The airline has been front in the

development of the economy in most countries, recently it announced that it would partner with

Monumental Sports and Entertainment and Maharashtra government an indication of the

companies commitment in economy development, it has also received several awards in the year

2016 it received award for ‘World’s Leading First Class’ services, at the Simplifying Awards

2018 the organization received the award for ‘Best Airline in Social Care’, the organization also

scooped ‘World’s Leading Airline’ award it has also taken home awards such as Best First Class

Onboard Catering, and Best First Class Airline Seat. With all the awards it had won, there is no

doubt that the organization is one among the best airline service provider in the entire world, it

has departments such as the tourism sector which is overseen through Etihad Holidays and also

Etihad Cargo {commonly known as Etihad Crystal Cargo} deals with transport and logistics

supply of goods and services (Airways, 2019).

The organizations' vision- Etihad

The organizations' vision is usually to be the best airline service on earth, connecting the world

via Abu Dhabi. The airline organization seeks to represent its worth of Arabian hospitality and

warmness and at the same time improving Abu Dhabi's reputation as a top-notch business and

leisure destination for vacations.Etihad is influenced by its Emirati principles and benchmarks

itself as not simply another airline but the best worldwide hospitality organization. The flight has

introduced lots of personal travel experience with world-class products and progressive service

offerings including flying nannies, Beverage Managers, and Inflight Chef (Ukessays.com, 2019).

The organizations' mission- Etihad

The objective of the airline organization's is to help make the almost all of its profitability

through the use of effectual business techniques for best maximum load factors, produce or yield

factors, minimum transit times, smooth and instant information to the traveling community, and

improve customers service (Ukessays.com, 2019).

Services offered by Etihad

The organization mainly focuses on two kinds of services which include the passenger services

and the cargo services; the organization, on the other hand, provides hospitality services by

providing temporary accommodation hotel services, and vehicle rental services. They also

partner with other services, in its strategic plan it plans to carry more than 25 billion passengers

by the year 2020 (Etihad Airways, 2019).

Financial Analysis -The table below shows the organization financial report based on last three

years 2018,2017 and 2016, as per the annual report.

 Year Revenue Net Profit EBIT EBITAIR

2018 10.2 80 250 990

Billion (US $) Million (US $) Million (US $) Million (US $)

2017 5.0 50 190 800

Billion (US $) Million (US $) 0Million (US $) Million (US $)

2016 4.5 20 150 700

Billion (US $) Million (US $) Million (US $) Million (US $)

Increasing the profitability year by year (Based on the year 2016 profitability)

Year Revenue Net Profit EBIT EBITAIR

2018 Increased 28 % Increased 50% Increased 23% Increased 35%

2016 Increased 18 % Increased 200% Increased 25% Increased 18%

From the above statement we can see the financial record result for 2013, with net profit up to

50% percent to the US $80 million on revenue up 28 percent to $10.2 billion, Etihad Airways

financial performance saw (EBIT) earnings before interest and tax 23% up to 250 Million (US $)

and (EBITDAR) earnings before interest, tax, depreciation, amortization, and rentals up 35% to

US$ 990 million, a margin of 18% of total revenues (Ft.com, 2019). The above marked three

consecutive years of net profitability within the 15 years of operations of Etihad Airways, This

result is noteworthy, given Etihad's young and aggressive development program, as well as its

continued investment support towards their products and services. These positive outcomes

mirror the focus on its board mandate and business plan, and the implementation of its system to
extend through a blend of organic growth, value interests and code shares in key markets. This

development technique is supported by a thorough cost control program and strict budgetary

discipline (Abeyratne, n.d.).

Reasons that made the organization go behind the national borders

A good number of companies in the current global market are establishing functions and

operation in the foreign business market, this kind of expansion in most cases provide a good

number of advantages which include but not limited to market growth opportunity and market

diversification. Companies opt to go global and enter international market for a number of

reasons, and these different aims during the process should produce different performance goals,

strategies and even kinds of market participation a method in which Etihad Airways has

managed to integrate into their business (Santos, 2019).

The following are reasons as to why Etihad decided to go global

Competitive advantage

Etihad Airways choose international expansion in order to gain a competitive edge over their

airline's competitors. It's imperative to note businesses or organizations that expand in markets

areas where their rivals don't work regularly have a first-mover advantage, this has enabled

Etihad Airways to build solid brand mindfulness and awareness with customers before their

rivals. Going behind borders has likewise helped organizations gain access to new industry

ecosystem and new technologies, which may essentially improve their operational activities.

Going beyond borders has likewise expanded the organization's apparent picture, as worldwide

operations have helped in building brand acknowledgment to help and supports future business
situations, for example, contract arrangements, new advertising efforts or even extra organization

development (Delfmann, 2005).

Diversified Income Stream

Etihad Airways owners comprehend the significance of diversifying income sources; On the off

chance that the business just has a couple of areas where it can move products and services, what

might occur if these business sectors encountered a dramatic shift in light of a cataclysmic event

or other unanticipated condition? Taking your business beyond borders enables you to

differentiate your business sectors so your income sources are increasingly steady: regardless of

whether your local movement is moderate, the business won't take as huge of a hit since its

worldwide market will compensate for any shortfall. Having that one noteworthy client can

appear to be a solution to a business' prosperity - until the organizations lose their clients. The

efforts made by the airline in Advertising its business beyond its borders has extended and

broadened its income sources by acquainting its products and enterprises with clients in different

nations. Along these lines, if the residential or domestic economy gets drowsy, Etihad can

temper the impact through income from nations with more beneficial and healthier economies. A

worldwide sale base can help pad the torment of losing clients by means of financial hardship.

Expand and improve its service offering

Not only does Etihad Airways develop a viable and readable business targeted to its new

customers going beyond its borders has enabled its brand to grows as and at the same time

increase service offering. The organizers aim to go global is to develop new ideas to improve

their services back at home where the said ideas are tested and applied abroad, tweaked for the

market to improve business models in the UAE (Vedder, 2008).

How Etihad Airways gained its competitive advantage using Porter’s five forces

The Etihad Airways direct competitors include Emirates Airlines, Fly Dubai, Air Arabia, Qatar

Airways, Oman Airlines and Gulf Air in the United Arabs Emirates including other Middle East

regions. Other Asian competitors involved are Singapore the biggest threat of all times however

in UAE the biggest competition comes from Emirates Airlines.

Porter's five forces is an imperative and important business analysis tool which was named after

its inventor Michael E. Doorman. This model examines five competitive forces that analyze

organization profitability and attractiveness of an association. The tool helps determine the

organization’s internal and external factors that determine the weaknesses and strengths of an

association. This section will break down the five elements in a steady progression in connection

to Etihad Airways (Group, 2006).

Industry Competition

The dimension of rivalry in the business is a critical determinant of the achievement of an entity.

For example, in the event that the business has extreme competitive organizations directly on

indirect, the association has little power and needs to establish new business modes and

resources. For this situation, Etihad airline faces a direct challenge with Emirates Airlines at the

residential or domestic dimension. The organization is additionally in rivalry with other airline

services, for example, Air Arabia and Qatar Airways. The number of airplanes and airbuses

among the UAE aviation segment increments quickly. This will compel Etihad to also increase

the number of fleets and airbuses likewise to stay aggressive.

The threat of new entrants

UAE aviation sector definitely an attractive business project and has seen new entrants each and

every year. The elements in this area may finish end up empowering more carrier airline service

providers that may constrain the development of Etihad Airways, however, each and every year

Etihad comes up with new projects and services that are unmatched to new entrants hence has an

advantage over other new airlines.

Threats of substitutes

The recent global recession has had negative impacts on the flight sector. For example, numerous

clients may select to utilize moderately less expensive flight service because of hard financial

terms. Presence of carrier organizations, for example, Oman Air and Jet Airways provide less

expensive administrations which is inconvenient to the development of Etihad Airways.

However, Etihad provides customers with relevant coupon codes and cash rewards that are

competitive in order to remain competitive in the market.

Bargaining power of customers

On the off chance that the clients have an advantage in bargaining, at that point, the

organization's benefits will diminish essentially. In any case, note that the bargaining power of

the client's in this industry is low. This is on the grounds that the travelers dependably always

adhere to the costs that the organization offers. Etihad dependably offers the cost for every one

of the flights it offers (Delfmann, 2005).

The bargaining power of suppliers

Bargaining power of suppliers is additionally critical in the accomplishment of an association.

The flying business has two principle players of Boeing aircraft and Airbus. Because of this
strength, the suppliers appear to have an advantage when contrasted with Etihad. In any case, the

organization always opts to purchase in bulk which always will lessen the bargaining power of

suppliers and stay competitive.

Etihad PESTEL Analysis-external environmental factors

Political

Etihad is a global airline situated in Abu Dhabi, operating globally, subsequently, the carrier is

for the most part exposed to global politics. In the recent developments where The Trump

administrations enacted the travel ban to confine travel for the natives of six Muslim nations

related with an expanded danger of terror attack is a political gimmick that may constrain Middle

Eastern airline development. Purportedly, because of the sudden drop in load factors on the

airlines in the Gulf ' flights to the United States, carriers such as Etihad Airways chose to reduce

the recurrence of united state flights and to stop certain routes. The European and the United

States airlines proceed with their solid campaigning exercises to limit Middle Eastern airlines'

entrance to their business sectors (Delfmann, 2005).

Economic

Etihad Airways are exposed to changes in the performance of the worldwide economy, so any

advancement in the macro environment changes the interest and the demand for the airline. Since

the 2007/08 budgetary crisis, the worldwide economy has recuperated and could show a

persistent moderate development (with positive repercussions for the aircraft business),

nonetheless, the capriciousness of developing markets' execution, (for example, Asia and Africa)

represents an economic danger for Gulf carriers. The drop in the cost of crude petroleum, on one

hand, helped numerous carriers to decrease their operational costs, yet on the other, for Gulf
airlines like Etihad, this additionally implied the interest and demand for premium travel to oil-

rich locales declined.

Socio-Cultural

Notwithstanding the monetary recuperation after the 2007/08 financial crisis, the development of

the middle class (and the quick rate of populace development) in emerging locales of the world

has likewise added to the positive change in the interest for air travel. As more individuals can

afford to go in developing countries, (for example, Africa and Asia) carriers can develop by

concentrating on these rewarding markets. The activities of Etihad Airways have been an

inconsistency with the social will of the general population. The significant case of the social

obligation of the organization is the association of the organization with Masdar which was

signed in the year 2009.

Technological

Etihad Airline has seen fast innovative and technological changes relating to the techniques

utilized to connect with their intended interest group and to find business patterns to improve

administration development and delivery. As more clients are utilizing the web platforms to

manage their appointments and bookings and to engage in with airline brands, industry players

have no option in embracing computerized innovation so as to follow changing client desires, for

example, mobile applications, modified administrations, adaptability and so forth. Concerning

airline technology, for a long time to come, airplane engine innovation isn't expected to witness

significant changes, despite the fact that Eco-friendliness fuel enhancements remain the best

need for airline and manufacturers also.

Environmental
The carrier business' carbon footprint has been progressively growing because of the expanded

interest in air travel. Producers are putting a lot of assets into R&D projects to develop options in

fossil fuel engines; NASA asserts that the utilization of bio-fuel could lessen the airline business’

pollution by 80 percent as the innovation develops. Changes in the global climate could bring

about one of kind difficulties for carrier activities, (for example, inclement climate).

Legal

Trump's administration chose to alleviate the heightening terror risk has brought about critical

lawful or legal difficulties for Middle East airlines. The travel prohibition on certain Muslim

nations' subjects is a lawful act that diminished Middle East airlines' entrance to European and

United States markets. Regardless of whether further activities will be sought after as far as

Middle East airlines access to US as well as EU markets is uncertain as a progressing process,

European and American carriers have been eagerly lobbied their legislatures to decrease the

apparently state-financed Middle Eastern airlines access to their business sectors, so far with

limited achievement.

Competitive

Discussing Air link, which is a noteworthy contender of Etihad, the number of planes controlled

by the organization is a lot higher than Etihad. Air link and comparable airlines like Air Arabia

trust in the provision of cheap service and better market, Air Arabia has multiple airplanes than

Etihad. It has a greater capacity for flying machines as well. Palm flying is quite concerned

towards long-distance flying bundles. For limited time exercises, greater firms like Air Arabia,

Aerovista use TV advertisements while littler firms utilize print media for advancing of their
administrations. Institutional marketing and coordinated effort with different firms are likewise

utilized as an advertising strategy.

Physical segment

Etihad aviation route is submitted completely to direct its business in a way which guarantees

dependable administration of ecological issues. However, with new natural methods coming up,

Etihad must attempt to embrace the same number of practices as they can so as to accomplish

green proficiency. Being ecological amicable add up to the altruism of the brand name

consequently. Etihad must maximize its environmental condition benevolent practices so as to

fulfill the physiological needs of the developing commercialization market.

Recommendation

 Etihad needs to re-access its productivity in within specific geographic zone. It is important

to go into code-share collisions in specific markets where there is a decrease in gainfulness.

By going into vital unions, Etihad will chop down critical expense and clearly still gain

marketing advantages of the vast size of network spread and diminish rivalry on duopolistic

courses.

 Market entrance is suggested through cutting costs in existing markets. Etihad ought to divert

its system to value competition to expand market inclusion from the lower-cost market. This

is plausible on the grounds that clients are more cost sensitive and development of spending

carriers is expanding.

 Etihad needs a strategic key arrangement for diminishing their expense and costs in light of

the fact that to survive in any budgetary crisis they need progressively retained profit to

ensure them.
 They ought to have a greater amount of the client's administration and loyalty programs. The

organization ought to give the rebate to its corporate customers. The organization ought to

connect with their customers when they have some limited time or promotional offers.

 From financial of scale and competitive advantage, Etihad can likewise fortify or extend the

capacity of other exceptional flying machine or specific cargo administration to existing

markets to gain benefit.

 Enhancing individual’s process is exceedingly prescribed. Likewise, an innovative technique

is an imperative interest.

Conclusions

Etihad has demonstrated over and over that with it's out of the box demeanor, supported by

extravagant Arabian accommodation it has earned a spot for itself in the minds of clients. Clients

who have experienced this administration would vouch for the norms set by the carriers. The

steady up gradation utilized by Etihad in giving administration by procuring new airplane,

guarantee that their planes will be noticeable in the air all around for most of the time than on

ground for support and maintenance. Etihad presently utilizes the system of having fewer

destinations than its rivals. This has empowered the carrier to give better services of the ones that

they have than running off looking for more up to the newer destination. This idea of value over

amount is of extraordinary concern in the airliner business, especially if the carrier needs to be

seen as a luxury brand and not a shoddy minimal effort, nitty-gritty carrier. Potential clients can

be increased just in the event that they could be persuaded that they are getting more bangs for

their buck. The view of clients towards quality has definitely ascended throughout the years and

many wouldn't see any problems with paying the additional cash on the off chance that they are

persuaded they are getting what they paid for (Baaghil, 2013).
Etihad knows this and deliberately puts their items and administrations to draw in these clients.

They realize that the carrier business is a sensitive one and verbal marketing is essential for their

survival. This is the reason they genuinely center on their clients and ensure that they feel

fulfilled and make it a point to return in the wake of being on one of their flights. As Abu-Dhabi

is transforming into a worldwide tourist destination and business community for the Middle East,

Etihad operations will be deliberately situated and they stand to pick up a potential offer of the

action. Henceforth maintaining the idea of 'Abu Dhabi to the world' is significant for their

marketing technique. This in addition point of Etihad to persuade their clients of their

predominant administration is the thing that drives them forward. If Etihad keeps on giving this

kind of unrivaled administration and pursues the low-value infiltration technique it can enter

more markets and repeat its prosperity.

The airline has demonstrated that it can retain its clients and that their client’s recommendation

of the carrier to others has worked in the benefit of Etihad. The airline needs to expand on this

brand devotion and keep on giving better and fresher administrations and step by step include

more destinations and develop at the relentless pace. This will see the aircraft achieving the best

position and ending up being a standout amongst the most favored ones in the avionics business.
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