LHRAUH | Revenuehunter

Executive Summary - Etihad (LHRAUH)

Incremental Revenue Potential Identified: £865k per annum.

Market Share Dynamics: This week, Etihad saw a 3% drop in forward booked market share on the AUHLHR route for travel in the next 360 days, down from 54% to 51%, while British Airways gained 3%, reaching 47%. Despite this shift, Etihad remains a leader in the direct service segment, indicating room for strategic adjustments to reclaim lost share.

Pricing Dynamics & Correlation with Market Share: The AUHLHR market is heavily influenced by the pricing strategies of direct carriers. Etihad’s competitive positioning with an average fare of £615 and a frequent presence as the second cheapest option has supported its substantial market share. A carefully managed fare increase could help boost revenue without significantly impacting its competitive edge against British Airways.

Travel Agency Opportunities: Etihad’s heavy reliance on the travel agency community—achieving an 80% share of new bookings through this channel compared to a 51% share across all sales channels—represents a potential vulnerability. While key partnerships with Southall Travel, Citibond Travel, and The Travel Tree are critical to maintaining market share, targeted re-engagement with underperforming agents like Hogg Robinson, Moresand Ltd, and Travel Up could help mitigate this reliance and drive additional revenue growth.

Market share dynamics

This week, Etihad Airways saw a significant 3% decline in its 360 day forward booked market share on the LHRAUH route, dropping from 54% last week to 51%. This loss appears to have benefited British Airways, which gained 3%, bringing its share up to 47%.

This shift in market dynamics signals an opportunity for Etihad to reinforce its position as the preferred carrier for direct services through targeted engagement and strategic adjustments.

Overall Pricing Dynamics & Correlation with Market Share

The AUHLHR market is defined by the dominance of direct carriers, with Etihad Airways and British Airways together controlling 97.9% of new forward bookings this week. Their high market share is supported by a strategic balance of competitive pricing and the convenience of direct services. Etihad Airways, with an average fare of £615 and more frequent occurrences as the second cheapest option (24 times), has positioned itself as a competitive yet value-driven choice for travelers. Its strategy of maintaining fares closer to the lowest available options has enabled it to capture a substantial 50.8% of the market.

In comparison, British Airways holds a slightly higher average fare of £637 and is the second cheapest 18 times, with a larger fare difference of £213 from the cheapest. Despite these differences, BA continues to attract a significant portion of travelers (47.1% market share) who value the convenience and reliability of its direct service. The airline’s strategy appears to balance maintaining brand value with competitive pricing, making it a strong competitor to Etihad.

Smaller Market Players: Gulf Air and Qatar Airways, both operating as connecting carriers, have not made significant inroads into the market share of the direct carriers. Gulf Air’s aggressive pricing, often leading the market with the lowest fares, has not translated into a larger share, remaining at just 0.1%. Similarly, Qatar Airways, with its premium fare positioning, holds a modest 1.0% market share. These figures suggest that price and service differentiation alone are not sufficient to overcome the preference for direct routes among travelers.

Potential for Etihad to Adjust Pricing for better revenue: Given Etihad’s slightly lower average fare relative to British Airways and its strong market share lead, there is room for Etihad to test moderate fare increases. By incrementally raising fares—especially during peak travel periods or for flexible fare classes—Etihad can potentially enhance revenue without significantly risking a shift in market share. The small gap between Etihad’s current fares and those of British Airways suggests that a 2-3% increase could improve revenue per ticket while maintaining price competitiveness. Monitoring traveler response closely during this adjustment period would ensure that Etihad retains its appeal among price-sensitive travelers. The annualized incremental revenue benefit of a modest 3% increase in average fare could amount to approximately £472k for Etihad.

Travel agent opportunities

Etihad Airways (EY) has achieved an impressive 80% share of new bookings on the LHRAUH route through the travel agency community this week, which is significantly higher than its overall market share across all sales channels, standing at 51% for this period. This highlights Etihad’s reliance on travel agencies to bolster its market position, as evidenced by a cumulative average share of 74% through agents—well above its 45% cumulative average across all channels. This strong performance within the travel agency segment underscores the importance of maintaining and optimizing key partnerships, while also addressing areas of underperformance where agent support lags behind the broader average.

Agents to Nurture

Southall Travel

Etihad maintains a dominant share of 93% of new bookings through Southall this week, despite a 4% decrease from the previous period. The cumulative share of 82% remains strong, and well ahead of Etihad’s overall cumulative travel agency share of 74%. This makes Southall a crucial partner in sustaining Etihad’s market leadership. The recent dip suggests an opportunity for deeper engagement to ensure continued alignment with broader market performance.

The Travel Tree

Etihad maintained a 100% share of new bookings with The Travel Tree, reflecting one of its most steadfast partnerships. This agent’s complete commitment to Etihad significantly contributes to the airline’s overall success on this route. Given that The Travel Tree’s support surpasses the broader travel agency average, maintaining this relationship through tailored support will be key to securing Etihad’s market position.

Citibond Travel

Citibond continues to deliver robust support to Etihad, with a 100% share of new bookings and a cumulative share of 97%. This far exceeds the overall 74% cumulative average across all travel agents, highlighting Citibond as a critical ally. To preserve this strong alignment, Etihad should consider joint promotional activities to sustain Citibond’s commitment and further enhance this partnership.

Trip.com

Etihad enjoyed a 100% share of new bookings through Trip.com this week, reflecting a deeply rooted partnership. The recent 6% increase in new bookings underscores the agent's role in driving Etihad's growth, making it a valuable partner. Given that this overperformance is above the broader agency community share, continued engagement with Trip.com could further amplify Etihad’s market presence.

Agents Requiring Attention

Hogg Robinson Travel

Etihad’s share of new bookings with Hogg Robinson dropped this week to 70% from 86% last week, falling below the 74% overall cumulative travel agency average. This decline suggests a loss of momentum, and alignment closer to Hogg Robinson’s cumulative share of 70%. Addressing this shortfall with targeted support could help Hogg Robinson align more closely with the broader agency market share of 74%, potentially generating an additional annualized revenue of £34k.

Moresand

Etihad's share with Moresand this week stands at 56%, significantly underperforming compared to the overall travel agency average of 80% this week. Moresand’s overall cumulative share remains relatively weak at 59%. Strategic re-engagement is necessary to close this gap and bring Moresand’s support closer in line with broader market trends. The annualized potential revenue benefit of engaging this travel agent and increasing market share to align with the average level across all agents could amount to £86k for Etihad.

Travel Up

Travel Up has been showing slow signs of recovery as of late. However, with a 50% share of new bookings this week, it still significantly underperforms the overall cumulative travel agency average of 74%. As the poorest performing of the top agents on this O&D, there is a clear opportunity for Etihad to target this agent for higher market share. By targeting this agent to achieve the overall cumulative average of 74% across all agents, Etihad could realize an additional annualized revenue of £273k.