Etihad poised to expand Australian market

[Keith T 2]

http://www.theaustralian.news.com.au/story...3-23349,00.html

 

Etihad poised to expand

 

Steve Creedy | April 11, 2008

 

ABU Dhabi-based Etihad expects to establish its third route to Australia within two years, after the successful launch of flights to Sydney and Brisbane.

 

Chief executive James Hogan also expects the airline to start flying directly from Brisbane to Abu Dhabi within the next year.

 

"Over the next 12 to 24 months, we would expect to enter one more Australian city and it makes sense that that could be either Melbourne or Perth," Mr Hogan said during a visit to Sydney this week to launch an extra four flights a week to Sydney from October.

 

The United Arab Emirates carrier has now been in Australia for just over a year and both the Sydney and Brisbane markets have been performing well.

 

The airline reported first-quarter 2008 load factors of 88 per cent on its direct flights from Sydney to Abu Dhabi and 71percent on its thrice-weekly flights between Abu Dhabi and Brisbane via Singapore. Mr Hogan said Sydney was the airline's most successful launch and continued to be one of the strongest routes in its network.

 

He said more than 100,000 passengers flew with the airline in its first year and load factors had remained consistently above "an impressive 80 per cent".

 

The premium cabins on Etihad's three-class A340-500 service to Sydney had proved an early drawcard and Mr Hogan said the response remained strong.

 

He believed this was due to a mixture of new aircraft, the availability of sleeper beds in premium classes, the airline's extensive in-flight entertainment offering and the convenience of transiting through Abu Dhabi.

 

"It is 14 hours to Abu Dhabi and whether you are going to London, Dublin, Beirut, Geneva, Paris or a range of Middle Eastern cities, the connectivity works well," he said. Etihad beat expectations last September to start its second Australian route with thrice-weekly flights from Brisbane to Abu Dhabi via Singapore.

 

"There is strong business traffic between Abu Dhabi and Singapore, there is a strong VFR (visiting friends and relatives) market to the UK coming out of Queensland especially, and we are also selling well between Brisbane and Singapore.

 

"It enables us to build both markets.

 

"Next year we will de-link and operate direct Brisbane to Abu Dhabi with a stand-alone Singapore-Abu Dhabi service."

 

Etihad currently boasts a fleet of 37 aircraft and will start adding another 12 from next year. Mr Hogan said this would help the airline improve frequencies to secondary European cities, where it was currently operating three or four times a week.

 

He also did not expect the airline to be affected by the credit crunch and a possible recession.

 

He said Abu Dhabi's gross domestic product was growing strongly on the back of $US60 billion ($65 billion) of projected investment over the next 10 years, which would generate activity in its own right.

 

India and China remained to be opened up, and he expected them to liberalise over the next year.

 

Forecasts for both premium and economy classes were strong and the airline also had year-round religious and worker traffic out of Southeast Asia.

 

Asked about rising fuel prices, he said Etihad was 70 per cent hedged for this year.

 

"A bigger issue for hedging is in 2009 and 2010, because we do not have the level of hedging in 2009 that we would like to have at this stage," he said.

[Pieter C. 5]

Good for them and the Australian customers: more airlines = more competition = (usually) lower fares

 

Wonder when QR starts to operate 'down under'...

[KK Lee 5]

 

Believe EY, EK, SQ and MH are targeting at the same Oz market.

 

While EY’s ex-SYD load is consistently in high 80% and MH’s ex-SYD is relying on code share with KL and tag on BNE to breakeven means IJ&co’s BTP and BTP2 strategy is losing out to competitors.

 

 

 

[Peter Smith 1]

MH’s ex-SYD is relying on code share with KL and tag on BNE to breakeven means IJ&co’s BTP and BTP2 strategy is losing out to competitors.

BNE was added to justify sending 744 to SYD twice each day, and also justify daily BNE flight. The KL codeshare is on all australian flights and was instigated by KL when they pulled out of Australia, not MH relying on them, although it does bring in some extra cash!

 

Pieter, QR were meant to start flights to MEL back in 05! I remember seeing the press release giving flight details and everything, but they never went on sale! We're also holding out for 9W, who are (or atleast were) in talks about starting MAA-PER, as there is a Western Australian trade office in Chennai so our premier has requested someone start up a direct link. Currently Jet codeshares on QF flights out of Singapore to Australia.

[Izanee 0]

its such a shame especially when MH was the second largest foreign operator into Aus/NZ after SQ not so long ago. they are just falling far behind their competitors now. why can other airlines make money while MH struggles?

something in IJ's btp2 sucks...i don;t know what as i am not an expert but only a 'keyboard warrior' ... their competitors are laughing all the way to the bank.

 

shitty management combined with a confused strategy and poor vision is MH's problems...not its frontline staff (maybe the ground crew). cutting back 5 million on catering is not going to significantly impact their bottom line...perhaps when they run out of planes to sell, it might help.

[Ryan Soh 3]

its such a shame especially when MH was the second largest foreign operator into Aus/NZ after SQ not so long ago. they are just falling far behind their competitors now. why can other airlines make money while MH struggles?

something in IJ's btp2 sucks...i don;t know what as i am not an expert but only a 'keyboard warrior' ... their competitors are laughing all the way to the bank.

 

shitty management combined with a confused strategy and poor vision is MH's problems...not its frontline staff (maybe the ground crew). cutting back 5 million on catering is not going to significantly impact their bottom line...perhaps when they run out of planes to sell, it might help.

Yes you are right, SQ is presently the largest foreign carrier out of Australia, not just that, and also CGK.

 

That being said, we have all dwell enough into the shortcomings of MAS it is no point going into that again, eh? If MH needs to cut back to regain profits, cut back it is then! Post IJ past Nov, I hope to see some strong brand building again for MAS because they sorely need it after getting soiled again and again.

[Keith T 2]

The KL codeshare is on all australian flights and was instigated by KL when they pulled out of Australia, not MH relying on them, although it does bring in some extra cash!

 

Indeed. It is extremely common serving Australia/NZ offline by codesharing and/or interlining. Much cheaper for the European carriers, and it's some extra cash in the kitty for the partners. Australia is now one of LH's and LX's highest yielding markets which they serve via both Asia and North America (LH's Australian GM said that there were 13 gateways although I can't identify all of them apart from the more obvious ones) - they're making more money from the market now than they ever did whilst actually flying here.

Edited April 12, 2008 by Keith T