Thursday, 1 October 2015

UAE carriers playing the field

Full article in PDF format

Even for aviation pundits well accustomed to the extravagance of the Gulf carriers, last summer's unveiling of the 'Residence' – an ultra-luxurious First Class product developed by Etihad Airways, the flag-carrier of Abu Dhabi – caught many in the industry by surprise.

Nestled in the nose of Etihad's double-decker Airbus A380s, the Residence comprises a living room, bathroom and double bedroom spread across 125 square feet of airborne real-estate. Passengers who stump up the $32,000 price tag for a one-way flight to New York are accompanied on their journey by a Savoy-trained butler and a personal chef. Nine smaller 'Apartments' fill out the remainder of the vast First Class cabin on Etihad's A380s.

While gawking at the sheer opulence of the Residence, journalists attending its May 2014 launch were quick to raise questions about the commercial viability of the product. Could Etihad really justify sacrificing so many standard seats for one single, ultra-high-yield customer? Would the super-rich clientele being targeted not simply prefer to charter a private jet?

Those questions – still unanswered today, owing to the lack of transparency in Etihad's financial reporting – lie at the heart of the seemingly endless controversy over Gulf-carrier business models...