Introduction
The market for airlines in the Middle East is known for its competitiveness, unlike many other industries, which often have a monopoly. This is linked to significant investments in the Middle Eastern aviation industry, which is considered a valuable resource for the region’s development (O’Connell and Bueno 1). In particular, the two major players in the Middle Eastern segment are Emirates and Etihad Airways.
Due to the invisible hand of the market emphasizing first-class passengers, the strategies of both airlines include this type of flight as a major point of competition. Therefore, this analysis aims to provide a comparison of the two airlines. It is argued that Emirates and Etihad Airways are similar in their approaches and the services they provide, which is why they are considered competitors in the airline industry; however, the challenges they encounter differ.
Analysis
The zoomed-out perspective of Emirates and Etihad Airways shows many similarities between the two airlines. One of the largest airlines operating in the United Arab Emirates, headquartered in Abu Dhabi, is Etihad Airways (Bose 21). On the other hand, Emirates is an airline based in Dubai, United Arab Emirates, and a subsidiary of the Emirates Group (Aman and Altass 63). According to Kucsera, these airlines “were able to define themselves as companies with premium quality but moderate prices” (106). Both prioritize investing effort and money in the development of premium-class services. In particular, it is evident in the way both airlines offer a wide range of services for this type of travel, a strategy that is likely to continue in the future.
It is also worth considering that Emirates and Etihad Airways have a similar selection of destinations, most of which are going to the East, limiting the potential customer pool (Kucsera). Notably, this choice is what makes the two companies natural rivals. To thoroughly dominate the market for either airline, a potential choice could be to expand the number of flights and available destinations. Such a solution may need to be more cost-effective in terms of both marketing and financial benefits.
Furthermore, pricing is an area where Emirates and Etihad Airways pursue a similar strategy. It is said that, until recently, both companies employed the tactic of offering tickets that were cheaper than the industry standard, despite being geared predominantly towards first-class passengers (Kucsera 109). Notably, Emirates and Etihad Airways have altered this policy in favor of a “dynamic price policy” (Kucsera 109). Moreover, both companies can be seen as trend-setters regarding the products they provide.
Among the many features they introduced to the market, Kucsera lists “onboard lounge with bar service; private suite with a minibar and bath; NASA-inspired zero-gravity seat technology; fully lie-flat and 180-degree rotatable seats” (110). Additionally, Emirates and Etihad Airways are similar in their extensive advertising efforts. Both companies are “world leaders in the industry” in harnessing social media for the promotion of their services (Kucsera 108). Further underscoring the similarity of the companies, Kucsera describes their slogans as “barely distinguishable” (109). This concludes the discussion of the main aspects that are characteristic of both Emirates and Etihad Airways.
As Emirates and Etihad Airways are broadly similar, it makes sense to focus on their differences. Overall, Emirates is focused on the premium segment, which is also where it has found outstanding success (Kucsera 112). However, their twin-aisle jets seem to be struggling, which prompts a policy change (Kucsera 112). Namely, a study by Qaiser and Altass found that the Emirates’ debt-to-equity ratio has an adverse effect on the airline’s performance (70). In comparison, Etihad Airways’ main achievement is its unprecedented growth rate (Kucsera 112).
However, the company made some errors in its marketing approach, brand development, and business strategy, which necessitated cost-cutting measures, including the removal of senior management and a revision of its corporate philosophy (Kucsera 107). Moreover, Etihad Airways struggles with operating costs that do not align with its earnings, while Emirates has successfully managed to contain these costs (Bose 22). Despite being competitors in the same market and making similar decisions, Etihad Airways and Emirates encounter somewhat different issues.
Conclusion
The bottom line is that both Emirates and Etihad Airways are similar in the way they set the benchmark in the world of professional service and flight services. Their innovation in passenger media and advertising is undeniable. In many ways, their customer-centric approach, as opposed to one based on brand promotion, makes them the most influential airlines in the world. The companies share similar approaches regarding brand strategy and pricing. However, they face different challenges; Emirates is too focused on premium passengers, and Etihad Airways is still addressing early mistakes. Due to this, it is challenging to predict which airline will emerge as the leader, as this depends on the policies that will be implemented to address current issues.
Works Cited
Bose, Indranil. “The Strategic Environment of the Aviation Industry in UAE: A Case Study on Etihad Airways.” IIUM Journal of Case Studies in Management, vol. 9, no. 1, 2018, pp. 21–27.
Kucsera, Emil. “The Importance of Environmental Impacts in the Marketing Policy of Emirates, Etihad and Qatar Airways.” Turisztikai És Vidékfejlesztési Tanulmányok, vol. 6, no. 2, 2021, pp. 101–16.
O’Connell, John F., and Bueno, Oriol Escofet. “A Study into the Hub Performance Emirates, Etihad Airways and Qatar Airways and Their Competitive Position against the Major European Hubbing Airlines.” Journal of Air Transport Management, vol. 69, June 2018, pp. 257–68.
Qaiser, Aman, and Sultan, Altass. “Impact of Capital Structure on Business Performance: A Case of Emirates Airline.” Amazonia Investiga, vol. 8, no. 21, 2019, pp. 62–72.