Abu Dhabi’s Etihad Airways has made a notable comeback, returning to profitability after navigating the challenges posed by the pandemic. This momentum was highlighted recently when the airline announced its plans to launch flights to Charlotte starting in May. During the IATA Annual General Meeting held in New Delhi, CEO Antonoaldo Neves discussed the significance of this strategic move.
Antonoaldo Neves
Charlotte: A Unique Opportunity for Etihad
Why Charlotte?
Neves emphasized that Charlotte is a significant but underserved market. “There are no airlines currently flying from the Middle East to Charlotte,” he explained. The growing immigration trends to the Carolinas present a unique opportunity, suggesting a strong potential demand for Etihad’s services.
Strategic Partnerships in a Competitive Market
Partnering with American Airlines
American Airlines, a dominant player at Charlotte Airport, will be a crucial ally for Etihad. Neves acknowledged the importance of codeshare partnerships, noting that their effectiveness varies across U.S. cities. He indicated that in some cases, codeshare customers make up less than 5% of traffic, emphasizing that while beneficial, codeshare agreements are just part of the overall strategy.
Timely Announcement and Market Strategy
Timing of the Launch
Interestingly, the announcement caught even Charlotte Airport off-guard, as they were informed just days ahead. Neves clarified that a seven-year plan for new destinations included Charlotte for the past three and a half years. While plans were in place for a March announcement, the presence of former President Trump in the UAE offered a unique marketing chance. “Why not anticipate?” Neves remarked, suggesting that the unexpected announcement would capitalize on existing publicity.
Expanding U.S. Operations
Growth Strategy in the U.S.
With the upcoming launch of Atlanta flights on July 2 and the introduction of Boston service last year, Etihad aims to solidify its presence in the U.S. market. After retracting routes to Los Angeles, Dallas, and San Francisco, the addition of Charlotte will bring Etihad’s U.S. destinations back to six.
Neves highlighted the operational advantage of U.S. Customs Preclearance at Abu Dhabi airport, allowing seamless connections for passengers traveling from the Gulf Cooperation Council, India, and Southeast Asia. “We’re moving to about 40 weekly frequencies to the U.S. next year,” he noted, contrasting this with his past experience managing flights to the U.S.
Future Prospects and Market Positioning
Anticipated Growth and New Destinations
Looking forward to the next five years, Neves projected the potential addition of three to five new destinations. He firmly believes there is ample room in the growing regional market for all players to thrive.
“Last year we achieved a 25% growth, and we aim for higher efficiency,” remarked Neves as he discussed Etihad’s positioning alongside competitors like Emirates and Qatar Airways. With a current net margin of 6%, he aspires for higher profitability levels while navigating competitive challenges. “If we grow a stronger carrier, we can collectively expand market opportunities,” he concluded.
