We’ve been drowning in a sea of short-term hygiene messages across the last year as airlines have rapidly ‘masked up’ in order to win over what little passenger volume there has been. Today’s passengers have been assaulted by marketing imagery of planes being scrubbed within an inch of their life, crew in body suits and dangly robotic trolleys marching their way through cabins with UVC cleansing – but visually, all of these efforts are psychologically temporary.  

The ‘Theatre of Operation’

Ironically, surface contamination has recently been all but ruled out by the CDC. Science has proven the chance of catching COVID-19 through surface touch is infinitesimal, meaning this ‘hygiene theatre’ will quickly erode. Meanwhile, airborne contamination – while still negligible – is still of greater risk, so airlines could end up adopting the likes of TEAGUE’s Airshield product. Products like this are additional visible manifestations of an airline’s ‘Duty of Care’ by offering a personal barrier, above and beyond the existing HEPA filtration that aircraft offer.

But with the fade away of these hygiene messages, how will airlines stand out and continue to drive passenger volumes upward? Simply put, brand image and passenger experience will be real motivators of consumer loyalty. If we are honest with ourselves, it’s the notion of full-service catering or reopened lounges that will bring our excitement back, enticing us out of the caves we’ve been hiding in for what seems a decade. There is already a rush to bring back full dining onboard with Turkish Airlines being the latest to celebrate a ‘return to normal’, shedding the questionable cardboard meal box offering that airlines quickly adopted in 2020. 

A question of loyalty

The last 12 months has also pressed the big reset button on the landscape of passenger’s loyalty. While most of the major airlines have held over customer’s existing tier levels, it’s going to be a lot harder for passengers to maintain them, and with dwindling business travel those tiers will be harder to keep in reach for many. 

Combining this with haemorrhaged route networks, higher airfares and less frequent schedules, airlines are going to potentially lose passengers through simple ‘brand loyalty attrition’, meaning smaller boutique carriers could swoop up these less loyal passengers. Benefitting from smaller operations, carriers like Air Tahiti Nui, Fiji Airways, Oman Air and Gulf Air can be more competitive and nimbler.

These boutique carriers are also (in theory) more resilient post-pandemic, as the majority of these brands all operate from less populous hubs, meaning as vaccines are rolled out, they will become more stable in regard to waves and border closures. 

There’s one airline that is in the process of repositioning itself to become a boutique carrier post-pandemic, but will they be able to stand out?

The trouble with Etihad

Let’s start by stating I’ve always been fond of Etihad. Just under a decade ago, it was the Middle Eastern underdog with grand ambitions. It had firmly positioned itself as the flag-carrier of the UAE with brand elements reflecting its home in Abu Dhabi. It benefitted from high-quality hard products across its fleet, First Class ‘butler’ styled service, a product ‘above’ first class dubbed The Residence and world-class lounges that featured Six Senses spas, barbers and chauffeur service for those in the premium cabins. 

It seemed to have hit a high note literally overnight, however this was during a period of high competition. Qatar Airways was constantly improving its products, and if a passenger snagged a ticket on a Middle Eastern carrier they were unwittingly transported in the midst of an ostentatious war between the airlines of the region to see who could offer the passenger that little bit more. 

This honeymoon period however was short-lived as the carrier’s expansion plans, new fleet and fuel costs meant the carrier was bleeding money, and while many airlines in the Middle East aren’t necessarily meant to be profit centres, the billion-dollar losses were hard to swallow for many. This meant cost-cutting quickly set in, with the airline in a race to the bottom to try and shore up its finances. Just a few years ago, chauffeur service was axed virtually everywhere apart from Abu Dhabi, Six Senses spas disappeared in all lounges apart from its hub, and the lounges ended up being managed by third parties too. 

Even in economy, the airline tried a hybrid model including charged seat allocation, full service and a buy-on-board catering offering, meaning that passengers were left baffled by the product on offer. Etihad quickly reversed this decision trying to simplify and reshape its product offering. 

But the swathes of changes, including the question mark over Etihad’s A380 product, have left the carrier with a big challenge ahead of itself – where will it position itself in 2021? Now that Wizz Abu Dhabi has launched, it has direct competition on its doorstep for the low-cost market, and Emirates, in the airline’s backyard – has dominance as a mid-market premium product – and even with the greatest will in the world, Etihad can’t compete with a more matured premium carrier like Qatar anymore. 

Queen of the Boutique Carriers

Etihad will be a smaller airline post-pandemic, it will focus on core profitable routes and use its existing fuel-efficient modern fleet to give itself a more realistic commercial advantage. However, unwittingly, that places it against the regional competitors such as Oman Air and Gulf Air, both with established models based on this exact business model. 

However, Etihad has the ability to be both larger, and more successful than both of these carriers. It has the scale – through a larger fleet and network, and a pre-existing premium product in all cabin classes that needs little investment. But for this to work, Etihad has to sharpen its pencil, and firmly set down brand roots that affirm its position. It can’t afford to coast through the next few years trying to find its wings, while the rest of the Middle Eastern market matures and cements their relative positions. 

Etihad should celebrate its position as a premium carrier, rely on cost efficiencies by not forcing growth, and put the power behind building brand confidence, looking to the boutique carriers to see where it can make small wins. Whether that’s bringing back chauffeur service, best-in-class dining options even in economy and focussing on its ground product in its new hub in Abu Dhabi (when it finally opens). It certainly has all the ingredients at its disposal to build the perfect recipe.

For this to happen, management within Etihad have to have trust that investment in keeping itself on the leading edge of passenger experience, and ensure its brand is robust enough that consumers globally understand what the airline’s proposition is. Building a strong brand position is no silver bullet, but it is vital to maintain in an already crowded market. But these decisions can never be run by committee or dictated by the finance department, as that’s where the long-term viability of the airline falls down. There has to be one singular unique voice that sets out a solid vision in order for Etihad to become the ‘Queen of the Boutique Carriers’, and only time will tell if Etihad can rise above its new competitors in the months and years ahead.  

Posted by:Jonny Clark

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