Etihad Airways has fired the opening salvo in a Gulf fares war, halving prices on its long-haul network in a bid to fill aircraft emptied by the escalating conflict between the United States, Israel and Iran.
The Abu Dhabi-based flag carrier is offering some of the keenest fares ever seen from the United Kingdom to Sydney, Singapore, Hong Kong, the Maldives, Bangkok and Tokyo for departures in May returning in June. A number of those fares now sit at roughly one-sixth of the equivalent ticket on British Airways.
Economy returns from London to Sydney via Abu Dhabi have dropped to £688 including all taxes, with a business-class seat on the same routing priced at £2,465. British Airways, by comparison, is charging from £1,850 in economy and £10,435 in business for Sydney travel on matching dates via Singapore. Etihad’s London to Singapore business fare of £1,521 undercuts BA’s £8,485 by a similar margin.
The state-owned airline is wagering that aggressive discounting will persuade nervous travellers to commit now, on the assumption that hostilities will have calmed by midsummer. Its own booking engine shows prices climbing again from July.
One Etihad executive, speaking on condition of anonymity because wartime protocols restrict comment on state entities to official government spokespeople, said: “As soon as travel picks up, we want to be back to flying planes 100 per cent full in all cabins, as we were before the conflict. These prices will help.”
The carrier is using the promotion to convert first-time flyers into loyal customers, reminding buyers of perks such as two complimentary nights in an Abu Dhabi hotel as part of its stopover package, though insiders concede uptake will be limited while Iranian strikes on the UAE continue. The Foreign, Commonwealth and Development Office currently advises against all but essential travel to the Emirates.
Etihad is also banking on the appeal of its new home at Zayed International, regarded by many frequent flyers as among the most efficient and design-led hubs in global aviation.
Passengers departing continental European cities will find fares roughly 10 per cent cheaper still, reflecting Heathrow’s status as the costliest airport in Europe for airline charges, costs which carriers routinely pass through to the ticket price.
Neither Emirates, the Dubai-based giant that remains the world’s largest international airline by passenger miles, nor its rival Qatar Airways has shown any appetite to match Etihad’s cuts. Both carriers are substantially larger and better equipped to weather the wartime slump, though each has introduced additional booking flexibility including one free date change.
One executive at a competing Gulf airline dismissed the move in private as “a crazy move that looks weak and cheapens its brand”, arguing that bargain-hunters would drift back to European carriers, Emirates, Qatar Airways or Turkish Airlines once prices normalised.
Henry Harteveldt, a leading aviation analyst at Atmosphere Research in the United States, took a more sympathetic view. Describing the strategy as “not unusual”, he drew a parallel with the response of US carriers after 9/11. “I call it ‘the price of courage’,” he said.
Harteveldt expects rivals to blink. “Despite what they may say now, I expect Etihad’s competitors will respond. Because not only do they have plenty of empty seats, the last thing they want to do is risk losing a passenger to Etihad.”