Eti­had Air­ways will con­tinue to be a cat­a­lyst in el­e­vat­ing the UAE cap­i­tal’s global per­cep­tion

Arabian Business English - - 2019 PREDICTIONS AVIATION - By Robin Ka­mark, CHIEF COM­MER­CIAL OF­FI­CER (CCO) OF ETI­HAD AVI­A­TION GROUP

ETI­HAD AIR­WAYS EN­JOYED a pe­riod of steady growth in the first and sec­ond quar­ters of 2018. How­ever, as the global mar­ket soft­ened, this growth be­gan to slow down to­wards the end of the year, par­tic­u­larly in the fourth quar­ter. This is of course not unique to Eti­had and is re­flec­tive of the si­t­u­a­tion across most of the in­dus­try. We pre­dict that this trend will con­tinue for at least the first quar­ter of 2019.

We have built cau­tious as­sump­tions into what we pre­dict for de­vel­op­ment in 2019 and this is a fore­cast of cau­tious growth in in­ter­na­tional travel and for the in­ter­na­tional mar­ket, which will in­crease.

Our anal­y­sis shows this mar­ket shift. The In­ter­na­tional Air Trans­port As­so­ci­a­tion (IATA) and the IMF have a slightly dif­fer­ent ap­proach but they have also cut their growth fore­cast, so I think in 2019, we will have a mar­ket that is ex­pand­ing at a lower rate, but still in pos­i­tive growth range. This should not im­pact Eti­had greatly as we have al­ready made and im­ple­mented some key de­ci­sions to re­flect this trend.

The re­gional mar­ket has been rel­a­tively flat and shrink­ing over the last cou­ple of years. Next year, we pre­dict a to­tally flat mar­ket in the re­gion. This means you will not see the sig­nif­i­cant growth pattern en­joyed some years back. There has been a lot of air traf­fic ca­pac­ity pushed into this mar­ket in the past few years and there is a huge sup­ply of ca­pac­ity pro­vided by all the main op­er­a­tors here. If there is one thing we know for cer­tain, it’s that you will most likely al­ways find a seat on your de­sired flight.

When it comes to tourism, with Abu Dhabi be­ing the key fo­cus, we at Eti­had believe that the cap­i­tal is still in the start­ing phase of build­ing and pro­mot­ing its world class at­trac­tions in­ter­na­tion­ally. Abu Dhabi and Dubai are com­pletely dif­fer­ent mar­kets. Abu

Dhabi has a slightly dif­fer­ent ap­proach, with dif­fer­ent tar­get cus­tomer seg­ments and, in turn, the UAE’s cap­i­tal is build­ing its brand in a dis­tinc­tive man­ner. Al­though both emi­rates have the beaches and year-round sun­shine, Abu Dhabi po­si­tions it­self as an all-around leisure des­ti­na­tion, built around ma­jor as­pects of cul­ture ap­peal­ing to the mid to high-end trav­eller, and choos­ing to show­case its Emi­rati her­itage. We en­joy close co­op­er­a­tion with the Depart­ment of Trans­port and The Depart­ment of Cul­ture and Tourism. We all un­der­stand that as key Abu Dhabi stake­hold­ers, we must in­vest in Abu Dhabi, and Eti­had as a ma­jor en­abler of travel and tourism to the emi­rate, has been do­ing so since its in­cep­tion and will con­tinue to do so.

Chal­lenges abound, nat­u­rally. In cer­tain mar­kets, Abu Dhabi is a well-known brand and in some mar­kets it isn’t. We still have some way to go in or­der to build the Abu Dhabi brand glob­ally. There is huge po­ten­tial as Abu Dhabi is a fan­tas­tic

WE ARE DO­ING THINGS RIGHT BY EAS­ING VISA AP­PLI­CA­TIONS” THE RE­GIONAL MAR­KET HAS BEEN REL­A­TIVELY FLAT AND SINK­ING OVER THE LAST COU­PLE OF YEARS” GLOBAL PER­CEP­TION AND AWARE­NESS OF ABU DHABI HAS NEVER BEEN HIGHER”

prod­uct, de­pend­ing on how you bun­dle it, pack­age it, dis­trib­ute it, in the right chan­nels and at the right time. That said, the global per­cep­tion and aware­ness of Abu Dhabi as a leisure and cul­tural des­ti­na­tion, in­clud­ing for stopovers, has never been higher.

As a ma­jor global air­line, we are af­fected by the price of oil. For for­ward bud­get­ing, rapidly fluc­tu­at­ing oil prices are very chal­leng­ing. What we saw through­out 2018 were fairly el­e­vated prices in the high seven­ties. Then, in only a few weeks, oil went from $74 a bar­rel, to $83, then down to $59 at its low­est.

Cur­rency fluc­tu­a­tions also con­tinue to have a ma­jor im­pact on the in­dus­try. The dol­lar has gained strength com­pared with many lo­cal cur­ren­cies, in­clud­ing more sta­ble Euro­pean cur­ren­cies, which from a rev­enue per­spec­tive ham­pers us neg­a­tively.

Those are the macro level fac­tors – mar­ket growth, oil prices and cur­rency – all be­yond our con­trol. We can mit­i­gate risk but we don’t in­flu­ence these fac­tors. How you mit­i­gate these risks is sim­ply down to how you be­have as a com­pany dur­ing these fluc­tu­a­tions.

These is­sues aside, we still see a lot of op­por­tu­nity – in­bound tourism and stopovers, for ex­am­ple, will ben­e­fit this mar­ket and ben­e­fit Eti­had. And we are do­ing things right by eas­ing visa ap­pli­ca­tions and open­ing our bor­ders for vis­i­tors. This is how you stim­u­late a tourism in­dus­try. It’s a very good sign and the re­gion will ben­e­fit from that.

Cur­rently, there is great in­ter­est in the Mid­dle East, but if you go to Europe, for ex­am­ple, and ask peo­ple what they know about the re­gion as a tourist des­ti­na­tion, you will get a very mixed re­sponse. When you ask first-time vis­i­tors to Abu Dhabi about their im­pres­sions of the place, 99 per­cent tell how pos­i­tively sur­prised they are. That fact takes us back to the need to build

Abu Dhabi as a brand, with the right con­tent. At the end of the day, cus­tomers ei­ther want to be point-to-point vis­i­tors, here for ap­prox­i­mately a week or more, or have cho­sen a stopover. What­ever the choice, you must have given them the rea­son to stay and, just as im­por­tantly, to re­turn.

Build­ing a brand Abu Dhabi has pro­moted it­self as a cul­tural des­ti­na­tion

Ma­jor events Thou­sands of peo­ple at­tend events such as the Abu Dhabi Grand Prix each year

On the rise In­ter­na­tional con­sumers are in­creas­ingly aware of Abu Dhabi

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