Etihad Embarks on Further Network Expansion

Etihad Airways, the national airline of the United Arab Emirates, has announced plans to introduce three more destinations to its core international network in 2014. Continuing the prodigious growth of its first decade, the airline will commence daily services to Rome (Italy) and Jaipur (India), together with four flights per week to Yerevan (Armenia) next year.

The new routes will join a previously announced daily service to Los Angeles and three flights per week to Dallas (United States), plus daily services to Zurich (Switzerland), Perth (Australia) and Medina (Saudi Arabia), all of which are scheduled to commence in 2014. The eight new routes will increase Etihad’s worldwide network to 102 destinations next year.

“This is part of a measured and strategic growth plan, which will reinforce the future of the national carrier of the UAE and the vital role it plays in the emergence of Abu Dhabi as a global aviation hub,” said James Hogan, president and chief executive officer, Etihad Airways.

To support this phase of its global network expansion, Etihad will receive 20 aircraft deliveries next year, including the much-awaited arrival of its first 787-9 Dreamliners and Airbus A380s. The airline will also receive five Boeing 777-200LRs, one Boeing 777-300ER, three Airbus A320s, three Airbus A321s, four Airbus A330-200s and one Airbus A330 Freighter in 2014.

The 2014 network plan also makes provision for increases in frequency and connectivity on existing routes, with more than 20 per cent growth expected in weekly departures. These will leverage upon the growing number of equity partners of the UAE carrier to develop an enhanced network offering. Etihad’s equity alliance airlines presently include airberlin, Aer Lingus, Air Serbia, Air Seychelles, Darwin Airline (subject to regulatory approval), Jet Airways and Virgin Australia.

“Together with our code-share and equity alliance partners, we have created a virtual network of more than 375 destinations. This collaborative model gives us scale and enhanced global market access in constrained regions. But more importantly, it strengthens our customer proposition by offering more choice and better connections across our hub in Abu Dhabi,” explained Hogan.

The new daily non-stop flights from Abu Dhabi to the Italian capital Rome will commence on July 15, 2014, subject to regulatory approvals. Rome Fiumicino will become the second Italian gateway to be served by the UAE carrier after Milan Malpensa. The route will be operated by an Airbus A330-200 aircraft in a two-class configuration, featuring 22 fully-flat beds in Pearl Business Class and 240 seats in Coral Economy Class.

Rome is one of the world’s most visited cities, attracts business and leisure travellers year-round, and with the historic Vatican City within its environs, is a major pilgrimage site. The city is also a hub for Etihad Airways’ codeshare partner, Alitalia.

“Since we started operations to Milan back in 2007, Etihad’s passenger and freighter operations between Italy and the UAE have gone from strength to strength. Abu Dhabi-Rome will extend our geographic presence in the Italian market even further, create an additional entry point to Europe with excellent onward connectivity options, and strengthen the already strong trade and leisure ties between Italy and the UAE,” said Hogan.

Appealing to business and leisure travellers in both directions, the new Rome daily flight schedule is designed to optimally connect with Etihad’s existing services over Abu Dhabi to destinations across the Gulf region, Indian subcontinent, Africa, Asia and Australia.

“Beyond Rome, travellers will be able to connect on new Etihad Regional services to cities such as Bolzano, Tirana and Zagreb, fly with Air Serbia to Belgrade, and in addition, continue to have access to Italian domestic and European cities courtesy of codeshare partner Alitalia,” added Hogan.

Etihad already places its ‘EY’ flight code on Alitalia’s existing Abu Dhabi - Rome services and beyond to cities such as Milan, Bucharest, Sofia, Vienna, Venice, Madrid, Malaga, Budapest, Malta and Barcelona. Alitalia has been serving the route since December 2012, while Bangladesh Biman Airlines has also served the route as an extension of flights from Dhaka for the past year. An estimated 31,000 bi-directional O&D passengers travelled on the route in the 12 months until September 2013 with Etihad already accounting for around 17 per cent of this demand through its codeshare arrangement.

Alongside the passenger demand there are also many freight benefits to the added capacity that will be on offer between the two markets from next summer. The UAE is Italy’s top trading partner in the Middle East and North Africa region, home to more than 3,000 Italian citizens, 90 Italian companies, and 390 Italian trade agencies.

“Business is booming with Italian exports to the UAE up 16 per cent in 2012 to US$ 6 billion,” explained Hogan. “The 13.1 tonne bellyhold capability for the daily Rome operation will allow us to boost the volume and value of trade between the UAE and Italy.”

The confirmation of the Rome, Jaipur and Yerevan routes followed just a week after Etihad announced plans to spread its network to the East and West with long-haul services to Dallas in the US and Perth in Australia. The airline will commence daily flights to Perth, Western Australia on July 15, 2014 and the new ultra-long haul three times weekly link to the US city of Dallas, from December 3, 2014.

The announcement of the Dallas route came just days after Qatar Airways revealed it will also introduce flights to the Texan gateway from its own Gulf hub in Doha, and will make it only the third US destination after New York and Washington to be served by the big three Middle East hub airlines. Dallas will be Etihad’s fifth destination in the US and its launch follows a recent pledge by carrier to continue to expand its US flight network to cater for growing demand from business and leisure travellers.

Dallas joins the other US cities of Chicago, New York, Washington D.C., and Los Angeles (to launch on June 1, 2014) on the Etihad flight network. The addition means the carrier will provide 31 return flights each week between the UAE and US by December 2014. Dallas is the largest and most important hub for American Airlines, Etihad’s US codeshare partner, and the new service will certainly strengthen Etihad’s reach and depth across the US, attracting air travellers from the Middle East region and Indian Subcontinent.

“The United States is one of Etihad Airways’ most important global markets and we are delighted to add Dallas, a key US destination and hub, to our flight network. The new service will also strengthen the deep commercial and bilateral ties between the United Arab Emirates and the United States,” said Hogan.

Much of the US demand on the Abu Dhabi – Dallas route will likely initially come from the oil and gas sector which has significant connections with Abu Dhabi and the Middle East, as well as from the 20 Fortune 500 companies based in Dallas and the 52 Fortune 500 companies based in Texas. Etihad will deploy a three cabin ultra-long range Boeing 777-200LR on the Dallas operation, an aircraft configured with 237 seats - eight Diamond First Class suites, 40 Pearl Business Class flatbed seats, and 189 Coral Economy Class seats.

Meanwhile, the non-stop services between the airline’s hub and Perth, its fourth Australian gateway brings to 351 the number of weekly flights which Etihad operates between Australia and Abu Dhabi (this includes three Sydney-Abu Dhabi services operated on its behalf by Virgin Australia). An Airbus A330-200 aircraft with 262 seats – 22 seats in Pearl Business Class and 240 in Coral Economy Class – will fly the route, augmenting Etihad’s existing double daily services to Sydney in conjunction with Virgin Australia, and daily flights to Brisbane and Melbourne.

According to Hogan, the new services will build the first ever commercial air bridge between Perth and Abu Dhabi and will cater to the growing demand for travel between these two points and beyond to Africa, the Middle East and Europe.

“Our analysis shows there is a significant business opportunity on the Perth route. Overseas visitor numbers are growing at a steady rate of around seven per cent overall – with several markets to which we fly – such as Germany, France, Italy and Ireland – recording an increase in visitor numbers of between 8.5 per cent and approximately 30 per cent in the 2012/13 financial year. Significantly, arrivals from the Middle East grew at more than 104 per cent over the same period. Western Australians, too, are travelling overseas in increasingly large numbers with an average annual growth rate of 8.5 per cent over the past three years,” he added.

The latest expansion has been made possible by the airline’s partnership with Virgin Australia to the success of the route, the executive said and that the current business arrangement and codeshare flights to 14 towns and cities in Western Australia (Albany, Broome, Busselton, Derby, Esperance, Geraldton, Kalgoorlie-Boulder, Kununurra, Karratha, Learmonth, Paraburdoo, Port Hedland, Ravensthorpe and Newman), added “immensely to the strength of the business case for the route”.

“We will also be well positioned to contribute to the economic development of regional centres through increased state-wide tourism flows. Eighty of the top 300 Australian companies have their headquarters in Perth and many of these have commercial interests in Africa and the Middle East. Equally, many UAE businesses have a strong presence in Australia, particularly in the agribusiness, resources and tourism sectors. We anticipate that this will translate to strong demand for our new services,” he added.

The network growth for Etihad will continue beyond 2014. In total, the carrier has over 220 narrow-body and wide-body aircraft on firm order, plus options and purchase rights for a further 81 aircraft. This includes recent orders for 117 Airbus and 82 Boeing aircraft with a combined list price value of US$ 67 billion, as announced at the Dubai Air Show last month.

“With ambitious plans to further accelerate our industry-leading growth in the future, the long-term expansion of our fleet is essential. Our future deliveries will allow us to progressively replace existing, less-efficient aircraft, add capacity in existing markets, and launch flights to more destinations, with over 30 new international routes planned by 2020,” added Hogan.

In the table below we highlight the rapid growth of Etihad’s operations over the past ten years. In 2003, at its infancy, the carrier served just three destinations with 50 annual frequencies and 13,000 seats. This year this has jumped to 85 destinations, 71,484 frequencies with a total available scheduled seat capacity of almost 16 million seats.