Etihad sees bright outlook for Thai aviation

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By Suchat Sritama

Civil war in the Middle East and North of Africa may have disturbed many airlines in the region including Etihad, the national airline of the United Arab Emirates. However, the airline’s chief executive officer, James Hogan, is confident that the business in Thailand will continue to grow.

Etihad airlineWhat is the outlook for Thailand-Middle East routes like this year compared to last year?

The Abu Dhabi-Bangkok route remains one of the strongest in the Etihad global network. In fact, demand, particularly from the UAE, UK and Europe, is so strong that we could easily operate a third daily service if we were not fleet-constrained.

Last year was a challenging year because of the effects of the volcanic ash cloud and the social unrest in Thailand.

However, the Thai market has shown itself to be resilient and able to rebound quickly after such events. Our collaboration with the Tourism Authority of Thailand has also had the effect of reinvigorating inbound tourism from markets across Europe.

Is current unrest in the Middle East and North Africa disturbing Etihad’s business? How is the airline dealing with it?

The civil unrest in some countries in the region has, of course, had an impact on our business in terms of passenger numbers. However, we continue to operate normal scheduled services to enable UAE nationals to be repatriated and our customers to return home. Our robust strategy of market segmentation ensures we are generally insulated from the negative effects of such incidents.

Will there be any changes in fuel surcharges, fares or aircraft types due to the rising price of jet fuel?

Rising fuel costs are a challenge for all airlines and remain a significant proportion of Etihad’s total costs, in the region of 40 per cent of our total operating costs.

Etihad manages the impact of fuel price fluctuations with an aggressive fuel hedging policy that was introduced in 2007, and at present we are hedged at a significant level for the year ahead. This helps to mitigate some of the risks asso

ciated with fluctuating, and in this case, increasing oil prices.

We continue to monitor the situation market by market, and adjustments to fares in a small number of markets, including Thailand, were made last month. This has had no impact on the aircraft types we operate on specific routes.

What are the prospects for the Thailand market this year, particularly in the second half?

The outlook for the second half of this year is positive, based on forward bookings. Our robust approach to segmentation ensures we continue to achieve the right mix of traffic on the route. Thailand remains a very popular destination and our extensive network of destinations means we can bring people to Bangkok from all over the world. Traffic between Bangkok and the UK and Europe, for example London, Manchester, Paris and Frankfurt, is particularly strong in both Business and Economy cabins.

Are there any new moves planned for Thailand in terms of frequencies, promotions and so on?

There is no increase in capacity or frequency planned for the Bangkok route in the short term. We continue to run seasonal promotions and tactical campaigns as local opportunities arise. As a sign of our enduring commitment to the Thai market, in Bangkok today we launched a new Thai-language communication campaign, which has a new, dedicated Thai-language website as the centrepiece.

We also recently signed a partnership with Arabian Smile Holidays, an innovative travel program designed to promote leisure travel to Abu Dhabi and other key European destinations on the Etihad network.

Will the airline gain benefits from Thailand from this year’s pilgrims?

Religious traffic contributes significantly to our passenger loads and is a very important part of our market out of Thailand.

What is your projection of business, load factor and passenger numbers for this year here?

Our forward projections show consistent performance in load factor terms of between 75 and 80 per cent. The Bangkok route is a significant contributor to Etihad’s goal of breaking even in 2011.

What is the global long-term plan for the airline, in terms of things like fleet, route and product expansion?

In 2008, Etihad announced one of the largest aircraft orders in the history of aviation for 100 aircraft and up to an additional 105 options and purchase rights. This includes 10 Airbus A380 aircraft which will enter the fleet progressively from 2014. Based on current modelling, our plan sees the A380 operating the Abu Dhabi to Bangkok route from around 2015.

We continue to look at opportunities to expand our network by adding new destinations in our own right and through code-share partnerships with other premium airlines.

Our focus on the customer also sees us continue to invest in product and service innovation in the air and on the ground.