Travelling to six cities in the Middle East is to become cheaper as Etihad Airways prepares to launch an "all economy" service.
Etihad to launch 'all-economy' service
Etihad Airways will launch its new all-economy service next week to six cities in the Middle East and the Indian sub-continent to fend off increased competition from budget airlines.
The airline has selected cities that feature heavy demand for economy services, but low demand for premium, business class or first class tickets, such as Alexandria, Colombo, Damascus, Thiruvananthapuram, Calicut and Peshawar.
It has converted several of its A320 aircraft, the smallest jet in its fleet, by taking out business class seats, opening up room for an additional 42 economy seats. Eventually, the airline expects to operate 10 all-economy planes, or 20 per cent of its anticipated A320 fleet for these services.
Budget airlines are considered a relatively new phenomenon in the Middle East but make up a third of all traffic in mature markets such as Europe and the US.
Analysts saw Etihad’s new service as a defensive measure to protect its home market from other competition. For example, one of its first destinations for the all-economy service is Alexandria, home to Air Arabia Egypt, which operates up to three budget flights a day into Abu Dhabi.
“This segment is being addressed aggressively by neighbouring flydubai, based in Dubai and, a few kilometres further along the road in the UAE, the highly successful Sharjah-based Air Arabia,” the Centre for Asia-Pacific Aviation said in a report. “Other low cost airlines from outside the UAE are also targeting the UAE markets.”
While the UAE’s long haul airlines, Emirates and Etihad, increasingly face budget rivals, they are also encountering growing competition from other Gulf airlines that seek to siphon traffic from the UAE’s five million residents onto their own networks.
Every day, Qatar Airways, Oman Air, and Gulf Air operate 31 flights a day from Abu Dhabi and Dubai to their respective hubs in Doha, Muscat and Manama, according to Innovata, the flight data firm.
Much of this capacity serves the demand for travel between these points for leisure and business traffic.
But these foreign airlines are also hoping to draw traffic to points further afield via their long-haul networks.
Tim Coombs, an analyst with Aviation Economics in London, said: “Clearly, the long-haul ambitions of each of these carriers rely to some extent on their short haul feed as well.
“Airlines are taking a proactive role in looking at the intra-Middle East market for this.”
Qatar Airways, in particular, offers the most number of flights between Dubai and any destination, with 16 flights a day, according to Innovata.
In Abu Dhabi, Qatar Airways’ 10 flights a day between the UAE capital and Doha are greater than any daily service offered by Etihad Airways to any destination.
That translates to 44,900 seats on offer from Qatar Airways each month between Abu Dhabi and Doha, compared with 31,000 monthly seats offered from Etihad.
Alistair Rivers, the regional sales director at Innovata, said: “It is quite interesting to see the other Gulf carriers trying to grab traffic away from Etihad and Emirates. It is all about competing hubs, and all trying to feed from the biggest pot, which is Dubai.”