ETIHAD AIRWAYS 1 Essay Example
Etihad Airways began its operations in 2003 in Abu Dhabi. These airlines operate a fleet of wide-body and narrow Airbus as well as Boeing Crafts. The Airline is considered young in the industry, but it is working to expand its networks and services across globe and especially where there is a high concentration of passenger, (O’Connell, 2011). The co-activity for Etihad is passenger carrying, but the company is also well versed with the cargo business.
The business model for Etihad Airways
Etihad’s business model is dynamic. It changes with change in the industry. Being ready for change is the best way to take advantage of the industry’s competitiveness. While Etihad Airline cannot be defined by one business model, this passenger/cargo carrier embraces a partnership type of business mode. Airline partnership is a tool for expanding business networks. Partnership or full alliance enhance revenue and reduce cost because of cost sharing resources for marketing and sales, (O’Connell, 2011). Code sharing routes is the most common way airlines use a partnering the tactic. Code sharing strategy is on the rise and Etihad is leading the industry with open to market operational strategy. Etihad Airways through Etihad Aviation Group is common with partial acquisitions, co-branding and full mergers. This business model accommodates new markets with new traffic, new services and new economies of scale.
Etihad reservations and flight booking is done online. When booking through online, the clients are applying for an air ticket, which is issued after payment is done. After completing the booking forms online, an email is sent to the customer. The first email confirms the flight and the second email confirms reservations that are likely not to change. After confirming reservations passenger will need their necessary travel documents to board the airplane.
Modifying a reservation
At Etihad, when flight modification is required, the customer is supposed to visit their online accounts and manage their bookings. The customer should understand reservation modification changes are made through the online platform. For modifications that cannot be done online, the client is advised to visit their travel agents especially those who assisted them with making reservations to make further modifications. The customer should understand that there are other modifications that will be difficult to complete through the online platform.
Redeeming Extra Miles
Etihad Airways presents bonus to its clients through its guest program called Etihad Guest. The Airline offers free flights of accumulated miles, through accumulated miles of other partner airlines. The company also offers limited mile offers through special seasonal promotion programs. Customers can also convert their loyalty points to 20% of the total miles they have travelled through Etihad. The Airline’s guest program offers redeemable miles through earning miles every time the customer flies with it.
Etihad Guest also provides family joining benefits. To earn miles through family joining, the Airline lets customers earn free mile from any family member flying and using a joint account. Through the family membership the customer benefits from added flexibility of earning mile even if they are not flying. Etihad allows up to 8 family members for the family membership package.
Business Modification Unification plan
Etihad Airways operating model determines the firm’s choice on the issue of handling integration and standardization of business process, (Doganis, 2006). The choice of IT infrastructure allowed the company to command influence within the industry for the past 8 years that it has been around. A clear potential business medication choice for this firm is unification in which the firm the firm implements a business process and IT infrastructure. The scope of IT infrastructure business plan is to bring forth an automated system of pre-existing loyalty and low cost capabilities that are part of the market operations.
The choice of the unification model allows Etihad to develop a high standardization and high integration of its business. This model enhances operational excellence, new product development, customer impact, a strategic agility and making better choices within the airline industry, (Fitzgerald & Siddiqui, 2002).
Through this model, Etihad has a deep dive in the business operating model that qualify as an IT enterprise architecture as well as a strategy for building a new business execution. Etihad, when applying this model, they find integrated business data as well as driving variability of business processes. The choice of Etihad’s model is part of the liberalization efforts to find marketable and profitable strategies in the industry that has intensified competition. Air transportation demand rises year after year. The future of the industry guide’s the firm’s unification business model that allows the airline to manage the impact of external factors within the industry that the airline management has no control over.
Etihad is a digital master
This airline has embraced the unification business operating model. This model is attributed to having a strong overarching digital vision, good governance, many digital initiatives generating business, value measurable ways and a strong digital culture. To demonstrate the airlines digital master strategies, the company hired Cognizant in January 2016 to digitalize the firm’s guest experience, (Consultancy.uk, 2016). Etihad Airways is digitalizing its business operations to improve its customer experience.
The first task for Cognizant is to analyse the company’s digital resources and digital strategy so as to devise strategic ways of leveraging customer’s experience, improve services and tap into new products that promise high profitability, (Consultancy.uk, 2016). Etihad is in its initial stages of improving their customer service through developing a digital transformation program. The digital transformation will occur across the airline’s equity and its strategic partners suggesting that this firm is a leader master of digital infrastructure coupled with the firm’s business unification model. Strengthening the digital system promise a world class digital ecosystem that will offer personalized customer experience as an aim of attracting more customers and recruiting frequent fliers into the airline’s loyal membership.
Etihad has it that it is not possible to change a situation, but the company challenged to change its business culture. The company realizes that it has the advantage of being young in the industry and benefiting from quick strategic changes hence quick culture modification. The firm’s culture will change from anything else to a digital culture. To succeed in changing any culture to the digital culture, Etihad ever prepares for a continuous upheaval and change. The key issue for this change is that the company must be ready to adopt change and must have a resources that are critical for change.
Etihad is already halfway in its playbook to implementing a digital culture. The firm has established it’s digital vision, it has a set of goals and deadlines, it has identified digital rewards for championship projects, it is encouraging creativity and is establishing a code of digital conduct. The company is leading by example, a strategy that will help it’s strategic business partner to follow the digital culture investment.
Consultancy.uk (2016). Cognizant to digitalize guest experience Etihad Airways. Retrieved on October 24, 2016 from http://www.consultancy.uk/news/3137/cognizant-to-digitalise-guest-experience-etihad-airways
Doganis, R. (2006). The airline business. Psychology Press.
Fitzgerald, G., & Siddiqui, F. A. (2002). Business process reengineering and flexibility: a case for unification. International Journal of Flexible Manufacturing Systems, 14(1), 73-86.
O’Connell, J. F. (2011). The rise of the Arabian Gulf carriers: An insight into the business model of Emirates Airline. Journal of Air Transport Management, 17(6), 339-346.
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