2020 has seen the rule book thrown out of the window. Carriers that have adapted quickly will see the largest market share in 2021. While many airlines continue to struggle just to survive day-to-day, some have taken this as an opportunity to level the playing field. While clear regional battles are at play across Asia, North America and Europe, perhaps the Middle East and its three major carriers are the most interesting to put under the microscope, as all of them are reliant on connecting traffic.
While strategically positioned in the geographical centre of the globe – making for a lucrative hub – Emirates, Etihad and Qatar have all taken a luxurious approach to flights over the past decade, luring one-stop travellers and in turn winning a significant market share of long-haul travel. This in itself is an impressive feat, considering each airline’s respective country’s population and limited inbound tourism.
But now, in 2020, it’s clear that the current premium market can’t really support three carriers fundamentally offering the same product from the same region no matter how they are skinned. Yet the same pandemic that has caused a game-changing disruption to the industry, might have also offered a rare window of opportunity for these three airlines to create a real point of difference from their next-door competitors.
The same pandemic that has caused a game-changing disruption to the industry, might have also offered a rare window of opportunity for airlines to create a real point of difference from their next-door competitors.
Before the pandemic Qatar Airways was already making headway in reimagining its Business Class proposition, hedging its bets on its fully enclosed QSuites. All new aircraft are sans-First Class, meaning the only Qatar Airways First Class cabins can be found on the carriers’ A380s, incidentally also the only fleet type to offer a bar for Qatar Airways’ premium passengers.
The airline inadvertently created a Covid-savvy Business Class product, as the enhanced privacy and space these seats offer provides the perception of protection and isolation that some travellers will actively be looking for now. With less focus on lounges and onboard bars, the QSuite (and the airline’s Oneworld membership) is now Qatar’s main weapon in winning over premium passengers.
As the airline has operated throughout the pandemic, and already with over 100 destinations served once again with a regular service, the carrier has already built a large international market-share and one of the first to reconnect major global city pairings. However, because of the complex web of quarantine restrictions across the globe, this strategy is high-risk as this large network will remain thin for the foreseeable future while business travel suffers.
Emirates in comparison has an inferior 777 premium product to Qatar, as its Business Class seats don’t feature all-aisle access, and this will become increasingly less appealing to passengers forking out thousands to travel internationally. While Emirates latest 777 cabins feature a very luxurious and fully-enclosed First Class suite, the price point of this seclusion will be out of the reach of many.
There is good reason why the airline has been quick to bring back its A380. While commercially a challenge to fly profitably, and historically not the most economical, the carrier can benefit from significantly lower fuel prices in the short term, which will go part way to offset the cost of these flying citadels.
The reason for Emirates to fly the A380 is that it offers the bar, shower suites and space overall feeling of space that will make it appealing not only to Business Class passengers, but economy passengers too – something the 777’s just don’t deliver.
The addition of the A380 to its most prestigious routes could become self-fulfilling, with the popularity of these flying whales helping fill them to a commercially successful load factor once again.
Where Emirates offered multiple daily A380 flights, frequency will certainly be less of an importance to long-haul travellers, therefore the airline can opt for a less-frequent schedule with larger aircraft. The most logical approach for Emirates is to focus on its core routes, reduce frequencies and market its onboard lounges, massive Dubai hub and large, spacious aircraft.
While Emirates and Qatar jostle for dominance through passenger numbers, Etihad should –in our opinion – look to continue its repositioning as a true ‘boutique luxury’ carrier. With a few small adjustments, and a return to its roots from five years ago, the airline could rule the roost with a more bespoke, intimate, and luxurious flight experience.
The airline has already mooted whether it will stick to its A380 services, and thanks to the consistency in its fleet nowadays, the only two things to fall away are its halo-enducing Residence product, and often-overlooked social space which is less of a bar, and more of a lounge. Instead, opting for its 787 and other wide-bodies, the airline could provide premium passengers a smaller, more exclusive product in the skies, and much like Virgin Atlantic’s approach, only opt for the most lucrative and important routes.
Etihad used to offer some of the better brand partnerships in the skies, from Six Senses spas on the ground and it still has Acqua Di Parma amenity kits. If the airline can continue to leverage these luxury brands, it can build a bespoke offering that is rooted in more refined luxuries. A few years ago, the airline tried to appeal to a larger, younger demographic, but the truth is that Emirates already ticks the ‘long-haul travel for the masses’ box and the confused product that Etihad ended up with caused confusion in the brand.
Even this week we are hearing about how the airline is removing its chefs & onboard meal specialists, something that had Etihad stand out in some way.
If the airline focusses on building back some of those luxuries, such as spas, chauffeur-drive, celebrity menus and branded amenities – and eventually new midfield terminal in Abu Dhabi, it can position itself as a smaller, more nimble, luxury brand not aimed at building passenger numbers but yield.
In theory the ME3 need to adapt and concentrate on building their unique brand positions, focusing on their individual strengths. In this topsy-turvy era, the airlines will benefit from celebrating their differences and make their markets stronger by supporting one-another. No one airline can out-muscle the other through market or product dominance. The long-haul ecosystem is currently crippled, and now, more than ever, airlines have to learn to give more to the few passengers they have.
This is no longer about a race to the lowest price point, it’s about building brand loyalty
This is no longer about a race to the lowest price point, it’s about building brand loyalty, and the premium market diaspora is varied enough to be catered for by more than just these three carriers, as long as they stand for different things, resonate with those who are travelling and don’t over-flood the network.