You may not have noticed, but Middle East airline Etihad has recently been seen to be making some cutbacks. Back in September last year, its sponsorship of the Docklands Arena in Victoria, Australia was discontinued. When an airline starts to drop these deals, it’s time to take a look at why. Is it a sign of a fall in finances? With a reported loss of $US4.8 billion over the last 3 years, this seems quite likely to be the case here.
Etihad is losing routes
Over the last decade, Etihad has added new routes, and really looked set to become one of the largest airlines in the world, but now we are seeing the airline cutting back on routes. Aviation journalists are reporting that the business has been badly managed and some poor decisions have been made over recent years.
New plane orders cancelled
It’s not just the routes that have seen cutbacks. Plans to order new planes have been cancelled. Obviously any order for planes is going to be massively expensive, but without new planes, can Etihad really keep going in the position it is in for much longer?
Has great service come at too high a price?
In a customer satisfaction survey last year, Etihad was voted the fourth best airline in the world. Across the board, customers have been impressed with the service. Innovative new products such as the amazing first class ‘Residence’ which saw those who can afford it flying in their own three room suite, and the business class in-flight bars have made the news.
Is following in Emirates footsteps a bad thing?
On the surface, copying the strategies of Emirates may seem like a good idea. The airline has certainly been successful, but when you’re the first to do something new, it’s really rather different to being just another following down the line and it seems that this is the position that Etihad has found itself in.
Further mistakes added to the losses
A serious of unfortunate investments have played their part in the accumulation of these losses. Investments in Air Berlin were wasted when the airline went bankrupt in 2017, and Etihad’s 49 percent stake in Alitalia seems to be currently an expensive mistake. Etihad presumed it could turn around these failing airlines, but this was not to be the case ultimately.
Is a merger on the cards?
There have been various rumours going around concerning a potential merger between Etihad and Emirates. However, a spokesperson for Etihad has strongly denied these rumours.