Etihad looking to measured growth

One of the airline’s aircraft

With its aim to become the world’s best full-service carrier, PETER BAUMGARTNER, Etihad’s chief commercial officer, tells TTN why it is important to plan ahead.

Looking ahead into 2010, how bullish are you about the aviation industry in the region?

Etihad Airways has seen measured and controlled growth in 2009 with its fleet growing to more than 50 aircraft and a flight network of 60 destinations. This measured growth will continue to be our focus for 2010. 

Our strategy for 2010 combines a number of route launches – such as Nagoya and Narita in Japan in the first quarter – as well as product enhancements in all three cabins and new code-share agreements which will widen further the range of destinations and travel options we are able to offer our customers.

Looking back at 2009, which markets were worst affected and in which do you expect to see the earliest recovery?

The aviation industry has been through one of its toughest periods ever but the signs are that the market is improving.

We are already starting to see signs of an upturn in 2010 but the next 12 months will still be tough for airlines, as they strive to recover from one of the most difficult periods the industry has ever encountered.

While we can expect to see people’s appetite for flying return – and therefore healthy seat factors – pressure is likely to remain on yields.

What is your focus for 2010? What are your projected load factors?

The growth during 2009, Etihad’s sixth year of operations, saw the airline achieve an average seat factor of 74 per cent. We are seeing definite signs of an upturn in passenger travel as well as in the cargo sector.

As this continues, we expect to see a corresponding industry focus in 2010 on responsible pricing, allowing yields to return to levels that will enable airlines to move back to profitability.

We expect to see load factors of 75 per cent and above in 2010.

Baumgartner…signs good

Etihad announced pushing back its profitability target to 2011, what needs to be done to achieve this target?

Etihad will continue to focus on revenue opportunities in the various sectors like passenger and freight, as well as ancillary revenue income from other areas of the business such as duty free. We will also focus on efficiencies in aircraft and fuel utilisation as well as staff and schedule efficiencies.

Are there plans to expand your network in 2010? Are there plans to re-evaluate any existing routes?

This year we will add flights to Colombo, Tokyo and Nagoya. We will also add new frequencies to Manila, Dublin, Kathmandu, Beirut, Cairo and Hyderabad. We also recently increased capacity by 60 per cent on our Manchester services as well as securing seven additional weekly flight frequencies from Abu Dhabi to Australia..

More recently you introduced a new service style for the economy class - why the need to further develop these products? Is this to keep economy traffic up?

To stay ahead in any business you must innovate and that is something Etihad puts great emphasis on. Every aircraft cabin is important to Etihad and we want every passenger to feel special when they fly with us. This is why the new economy cabins have Paltrona Frau trims on the head rests and the new inspired service offering which includes café-style hot drinks and a more personalised service.

What about premium traffic? Do you expect that to pick up this year?

The aviation industry is very cyclical and it is important to plan ahead. Downturns are exactly the time when businesses need to demonstrate confidence and their commitment to the very highest standards of service excellence. Etihad has done just that, rolling out its new first class and with major upgrades of its business and economy cabins to come. As the recovery starts to gather pace, our recent investment and product innovation will ensure we are strongly placed to take full advantage.

Are there plans to further enhance onboard services?

Competition for customers remains intense but Etihad is in a much stronger position than many other carriers, thanks to the significant investment we have put into our product and service during the past 18 months, both in the air and on the ground.

Can we expect to hear announcements on new aircraft orders in 2010?

We are not expecting to announce any new aircraft orders this year. We will however take delivery of four Airbus planes from our existing orders: two A330-300 passenger and two A330-200 freighter aircraft.