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Etihad has designs on the US market

The big UAE airlines look set to compete over US skies

Aircraft, Airplane, Transportation Etihad Airways
Etihad recently announced a Boston route from March 2024 – its fourth US destination

UAE airlines Emirates and Etihad announced a new interline agreement in May which simplified travel across the two carriers, but Abu Dhabi’s carrier looks set to gradually take on its larger rival on US routes.

The jury is still out as to whether the interline deal will have real impact, or become more of a symbolic pact to buttress against Saudi Arabia’s substantial aviation ambitions.

For such interline agreements to be successful there needs to be a high degree of network overlap, otherwise one airline tends to benefit more than the other. In the context of this new UAE agreement, the odds are stacked towards Dubai’s Emirates, given the size and scale of their respective networks. 

As the peak holiday season begins to slow, airlines have just about finalised their winter schedules. Aviation analytics firm OAG has compared how the two big UAE carriers stack up against each other on a like-for-like basis.

As the data below shows, the gap between the two airlines this winter is vast. This suggests the recent interline agreement is somewhat one-sided.

Network metricEmiratesEtihad Airways
Scheduled flights71,50621,003
Countries served7344
Airports served13469
Key network metrics: Emirates and Etihad Airways, Winter 2023/24. Source: OAG schedules analyser

Emirates boasts three times more scheduled flights and serves 29 more countries than Abu Dhabi national carrier Etihad.

Major country markets that are not served by Etihad include Hong Kong, Brazil, Kenya, Vietnam and New Zealand. By any metric, the current balance between the two airlines favours Emirates.

New management, strategy and network

Former Etihad CEO Tony Douglas was a somewhat surprising hire for Saudi Arabia’s brand-new carrier Riyadh Air. But when he joined in late 2022, he was swiftly followed by senior members of his previous Abu Dhabi team.

Douglas’ replacement Antonoaldo Neves arrived at Etihad from Tap Air Portugal around the same time.

But the first real change that we have seen from Etihad’s new management team is the reintroduction of the A380 – a plane that had been given the “kiss of death” by the previous management team. 

In the context of a strong global aviation market, it makes sense for Etihad to bring back the A380 wide-bodied aircraft.

However, limiting its services to London Heathrow means some opportunities may be missed in the larger connecting markets, such as South East Asia. 

Nevertheless, the revived service of four A380s and the provision of a regular first-class service on the London route will at least appease nine local travellers per flight looking for seven hours of luxury (even if I’m not one of them!).

Destination Boston

Bringing back the A380 also enables Etihad to release its aircraft to operate new routes, or add frequencies to existing destinations.

As such, Etihad recently announced a Boston route from March 2024 – its fourth US destination.

The choice of Boston may seem odd given that Emirates already serves 11 destinations in the US. However, there may be more to this secondary East coast destination choice than meets the eye.

DestinationTotal estimated passengersTotal no. of seatsLoad factor %
New York JFK577,807746,03177.5
Los Angeles267,939376,90871.1
San Francisco226,802337,94067.1
Washington IAD220,310327,18667.3
Chicago181,959259,49270.1
Seattle171,073254,68067.2
Boston170,218251,09667.8
Houston161,564223,12072.4
Dallas 157,871216,17273
Miami147,621209,56870.4
Orlando117,224167,46870
Emirates 2022 market performance. Source: OAG schedules analyser

As the table above shows, Emirates’ performance to the US in 2022 was mixed. Average load factors ranged from 77 percent in the case of New York JFK to 67 percent to Boston, Seattle, San Francisco and Washington. 

Etihad’s three US destinations in 2022 delivered slightly higher load factors on all routes than Emirates, as below, suggesting it can hold its own in the North American market. This sends a positive message for when Etihad starts to compete in Boston. 

DestinationTotal estimated passengersTotal no. of seatsLoad factor %
New York JFK203,445257,33079.1
Chicago185,735241,67076.9
Washington IAD114,440164,98069.4
Etihad Airways US market performance. Source: OAG schedules analyser

In the case of Etihad, Boston represents a low-risk launch route. A large proportion of connecting traffic from the Indian sub-continent will connect with its planned 03:10 departure from Abu Dhabi.

Thanks to its existing relationship with JetBlue, onward connectivity from Boston will be possible from around the middle of the day to a range of domestic points.

In addition, the Boston to Abu Dhabi route offers opportunities for cargo traffic, particularly high-yielding perishable products such as fish and lobster.

While Boston is as near to a natural development as you can expect for a carrier like Etihad, it will need to crack the west coast US market if it is really to compete on network reach with Emirates. 

For most airlines that would mean launching a Los Angeles or San Francisco service – both of which are operationally possible, taking not that much longer than a New York flight. 

What‘s more, all the necessary regulatory hurdles are cleared under a long-established Open Skies agreement between the two countries.

So, before you book that Boston flight in March next year, perhaps hold on just a little longer, because Los Angeles may just appear on the network sometime soon.

John Grant is partner at UK consultancy Midas Aviation

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