Though faced with intense competition from regional airlines, Abu-Dhabi-based Etihad Airways announced record first quarter figures, boosting the emirate's fast growing tourism and aviation sector.
Etihad carried 1.4m passengers in the first three months of this year, an increase of 40% on the same period last year, and looks on target to achieve its stated goal of carrying 6m passengers this year. Yield, or the average fee per ticket, increased 25% to an unspecified amount. Seat factor, or the average number of passengers as a percentage of capacity, increased by 7% to 75% on all routes.
The airline has seen particular success in its routes to the South East Asia-Pacific region. Flights to Bangkok had an average seat factor of 91%, those to Sydney 88%, Manila, 86% and Jakarta 84%. Other destinations seeing an average seat factor of more than 80% included Brussels, Lahore, Paris, Toronto and Cairo.
Etihad currently operates flights to 45 destinations, the latest being Beijing, a route launched on March 30. Moscow, Chennai in southern India, and Almaty, the largest city in Kazakhstan, are likely to be added to the list before the end of the year.
Etihad is extending its summer programme extensively this year; the airline plans to operate 728 weekly flights, up from 494 last year, an increase of 47%. It will be increasing services to cities in the Middle East and South Asia from which many migrant workers originate, and where Emiratis are increasingly investing, such as Cairo, Beirut and Karachi. This seems like a sensible strategy, given the increasingly intense competition in the Gulf. For the time being at least, as the Q1 results indicate, there is enough growth for airlines to turn a profit without cutthroat competition, but this may not be the case in the long term.
Dubai-based airline Emirates recently opened its 100th destination, and remains probably the best-known of the regional carriers. With Dubai's airport two to three hours' drive from Abu Dhabi, Emirates provides an alternative to Etihad. A little further afield, Air Arabia offers budget flights to Sharjah, and is credited with helping ease prices in the United Arab Emirates. Meanwhile, Qatar Airways has set out a very ambitious expansion strategy, and Doha is but a short hop from the Emirati capital.
Given the growing options available to travelers, Etihad is competing on its ability to deliver directly to Abu Dhabi, as well as coordinating with the growing tourism and MICE (meetings, incentives, conferences and exhibitions) strategy, which rightly focus on Abu Dhabi's unique attractions and facilities.
Etihad's expansion is seen by the Abu Dhabi authorities as playing a key part in developing the emirate's tourism industry. Currently, the majority of visitors come for business, and Etihad seems to be particularly strong in the high-end segment, where seat factors were noticeably higher. MICE tourism is an increasingly important contributor to the emirate's economy, bringing in an estimated $520m annually. Events like Cityscape Abu Dhabi, the International Defence Conference and Exhibition (IDEX), and the Gulf Incentive Business Travel and Meetings Exhibition (GIBTM) are likely to be providing a fillip for Etihad, and will continue to do so as the Abu Dhabi National Exhibition Centre (ADNEC) expands.
However, Abu Dhabi has ambitions beyond its growing business tourism sector, which has been at the core of its development thus far. Over the next few years, a range of world-class museums and other attractions will be inaugurated in the emirate, including the Louvre and Guggenheim Museums and a Formula One circuit. Meanwhile, its desert interior and varied islands are being carefully opened to high-end tourism, particularly eco-tourism.