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Etihad ‘Improves Value Proposition’ for Passengers by Introducing New Charges, Cuts Services

Etihad ‘Improves Value Proposition’ for Passengers by Introducing New Charges, Cuts Services

Etihad 'Improves Value Proposition' for Passengers by Introducing New Charges, Cuts Services

It appears that Etihad Airways is taking its cost-cutting efforts up a notch with a slew of new charges and paid options available for passengers.  Or as the airline is calling it – an effort to “improve its value proposition for guests.”  The biggest change will see Etihad remove complimentary chauffeur services for some Business and First Class passengers.

Etihad has been battling an increasingly hostile environment – In the last few weeks, the Abu Dhabi-based airline announced it would be ceasing its San Francisco service as a result of poor ticket sales.  That decision followed the U.S. Electronics Ban and the attempted, so called ‘Muslim Ban’.

The airline is still getting to grips with huge losses made at its equity partners Alitalia and Air Berlin.  Etihad has reinvested in the latter while the final outcome of Alitalia’s insolvency is still to be decided.  Elsewhere, Etihad has been forced to suspend it’s Abu Dhabi to Doha services following the UAE’s decision to cut diplomatic relations with Qatar.

It’s probably no surprise, therefore, that Etihad is thinking up increasingly interesting ways to not only cut costs but also upsell services to existing customers.  One of the more innovative ideas coming from the airline is a ‘Neighbour-Free Seat’ paid option in Economy Class.

The idea is that Economy passengers can bid for up to three empty seats next to their original seat.  The system will adjust subject to availability but bids can only be submitted at the time of booking.  Passengers who have made a successful bid will be notified 30 hours prior to departure.  For Etihad, this is a great way to make use of underutilised seats as the airline’s load factor continues to struggle.

Not such a great idea is the cutting of Etihad’s chauffeur service.  Although the airline plans to keep the full service in Abu Dhabi, it will be drastically cutting back at outstations.  The changes will take effect from July 3rd with Business and First Class passengers no longer eligible for complimentary chauffeur drive services.  Instead, eligible passengers will be able to pay an additional fee at “specially discounted rates”.

Explaining the decision, Mohammad Al Bulooki, Executive Vice President Commercial said: “Etihad Airways is constantly looking at ways to improve its value proposition for guests, focusing on the service elements that are most important to them,”

He continued: “This change is being put in place as the airline looks to evolve its product proposition while continuing to match individual customer requirements.”

Al Bulooki argued many passengers preferred to make their own ground transportation arrangements and the cutbacks would help Etihad keep fares low.  However, guests in Etihad’s ultra-luxury Residence class will still be treated to chauffeur drive services in London, Paris, Sydney and New York.

In contrast, neighbouring Emirates has retained its complimentary chauffeur service at 75 destinations worldwide.  The Dubai-based airline recently announced that it had partnered with BMW for its hometown chauffeur service.  Passengers in Business and First Class will now be whisked away from Dubai airport in BMW 520i Touring cars.  The collaboration replaces a longstanding deal that Emirates had with Volvo.

However, one area that Etihad is keen to match Emirates is offering paid access to its premium lounges.  Earlier this year, Emirates allowed Economy passengers to pay for access to its huge Business Class lounge in Dubai’s Terminal 3.  Now, Etihad will allow passengers in Economy Class to pay for entry into it’s dedicated Business Class lounges

The available locations are Abu Dhabi, London, Manchester, Dublin, Paris, Washington D.C., New York JFK, Sydney, Melbourne and Los Angeles.  Business Class passengers will also be able to upgrade to the flagship First Class Lounge & Spa when flying from or transiting in Abu Dhabi.

Al Bulooki said the decision had been made so “these signature lounges can now be enjoyed by all who desire to experience our award-winning facilities.”

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