LHRKUL | Revenuehunter

Executive Summary - Etihad (LHRKUL)

Incremental Revenue Potential Identified: £307k per annum.

Market Share Dynamics: The LHRKUL market remains dominated by direct carriers, with British Airways leading at 56.6% and Malaysia Airlines at 18.6%, jointly holding 75.2% of new bookings for travel in the next 360 days. Among connecting carriers, Qatar Airways showed a significant increase in market share, rising to 11.1% from 4.9%, while Emirates declined to 4.3%. Etihad’s market share stands at 3.2%, consistent with its cumulative average of 2.9%, indicating steady demand for its connecting services through Abu Dhabi amidst a competitive landscape.

Pricing Dynamics & Correlation with Market Share: Etihad’s average fare of £841 positions it between lower-priced competitors like Qatar Airways (£744) and premium options such as Emirates (£1,198). Despite its competitive pricing, Etihad’s market share remains relatively modest, suggesting that factors like direct connectivity and brand preference may play a larger role in traveler decisions on this route. A slight adjustment in fare could help Etihad better align with market dynamics, targeting segments that value a balance between service quality and cost.

Travel Agency Opportunities: Re-engagement with underperforming agents presents an opportunity for Etihad to strengthen its market presence. Key focus areas include E Travel Online, where Etihad’s share has recently declined, and Trip.com, where support has shifted towards direct competitors like Malaysia Airlines. Addressing gaps with agents like Polani Travel and Gold Medal Travel, which have historically shown lower support, could further stabilize Etihad’s market share and enhance its position against dominant carriers on the route.

Market share dynamics

This week, the LHRKUL route remains dominated by direct carriers, with British Airways and Malaysia Airlines jointly capturing 75.2% of new bookings for travel in the next 360 days. British Airways leads with a 56.6% market share, up from 50.4% last week, reinforcing its strong position on the route. Malaysia Airlines holds 18.6%, slightly down from 21.9% last week, yet remains a key direct option.

Among the connecting carriers, Qatar Airways posted a significant increase in market share, rising to 11.1% from 4.9% last week, leveraging its appeal as a competitive connecting option. Emirates experienced a decline to 4.3%, down from 6.4% last week, yet remains a premium choice for travelers through Dubai. The remaining connecting carriers, such as Air China and Saudia, maintained smaller shares but showed stability, reflecting their niche role in the market. This competitive dynamic suggests that while direct options remain the primary choice, there is room for connecting carriers to capture market share through strategic positioning.

Overall Pricing Dynamics & Correlation with Market Share

Pricing strategies among the major airlines have played a pivotal role in shaping market share on the LHRKUL route this week. Emirates, for instance, offers a higher average fare of £1,198, yet it maintains a relatively strong position in the market, suggesting that its premium pricing is offset by the value perceived in its services through Dubai. Despite a decrease in market share, Emirates' ability to remain a preferred option highlights the strength of its brand.

Qatar Airways, with an average fare of £744, continues to position itself as a more accessible choice. This competitive pricing strategy has helped Qatar increase its market share to 11.1%, up from last week's 4.9%. The airline’s significant presence among the lowest fares in the market, with 30 instances of being the cheapest, further underscores its focus on attracting price-sensitive travelers.

Malaysia Airlines, with an average fare of £1,017, saw a slight drop in market share to 18.6% this week, down from 21.9%. This aligns with its positioning as a mid-tier option, though its premium fares have not prevented a slight erosion of market share. In contrast, British Airways maintains its market-leading share despite offering an average fare of £766, leveraging its direct service to appeal to travelers willing to pay a premium for non-stop connectivity.

Saudia's market share has declined despite its relatively higher pricing of £1,109, suggesting that the premium cost has not translated into a higher preference among travelers. This contrasts with the success of direct options like British Airways, which have sustained their market share despite premium positioning.

Overall, the interplay between pricing strategies and market share on this route highlights that while competitive pricing can attract share, brand strength and direct connectivity often justify higher fare levels, especially for premium carriers like British Airways and Emirates.

Focus on Etihad Airways

Etihad Airways holds a 3.2% share of new bookings this week, which is consistent with its cumulative average of 2.9%. This stability in market share suggests a steady demand for Etihad’s connecting services via Abu Dhabi, even as competitors like Qatar Airways and Emirates exhibit more volatility. The airline's average fare of £841 places it between the lower-priced options like Qatar Airways and the premium fares of Emirates. Despite its competitive pricing, Etihad’s market share remains modest, indicating that factors beyond price, such as connectivity options and brand preference, may be influencing traveler decisions.

Given Etihad's positioning in the market, there is room for a modest fare increase—potentially around 3-5%. This recommendation is based on the observation that Emirates, with its higher average fare of £1,198, still maintains a strong market presence, suggesting that travelers are willing to pay a premium for quality service and convenience. A slight upward adjustment in Etihad’s fares could help improve revenue without significantly impacting its competitive stance, especially if targeted towards segments that value service quality and convenience.

Overall, while Etihad’s pricing strategy has helped maintain a stable market position, an incremental fare adjustment could support higher revenue gains of a modest £32k, leveraging the airline’s competitive positioning relative to higher-priced peers like Emirates.

Travel agent opportunities

Etihad Airways holds a 5.3% share of new bookings through the travel agency community on the LHRKUL route this week, which aligns closely with its cumulative performance over time. This consistency highlights the airline’s reliance on key travel agents to maintain its presence in the market, especially amidst a highly competitive environment with other strong carriers. Identifying areas of decline or persistent gaps is crucial for Etihad to stabilize and grow its market share further.

Agents to Nurture

E Travel Online

Historically, E Travel Online has been a significant supporter of Etihad, with a cumulative average share of 18.08%, well above Etihad's average share with the travel agency community (5.3%). However, the recent weeks have seen a decline, with Etihad’s share falling to 7.41% this week from 10.49% previously, indicating a shift away from the airline. Meanwhile, Air China has seen a notable rise in support from E Travel Online, securing 29.63% of the agent’s new bookings this week. This shift suggests that E Travel Online’s customers may be finding alternative value propositions, and re-engaging this agent could help Etihad regain its previous momentum in this segment.

Trip.com

Trip.com has generally supported Etihad well, with a cumulative average share of 14.62%, well above Etihad's average share with the travel agency community (5.3%). Despite this historical strength, recent weeks have shown a downturn, with Etihad’s share dropping to 5.47% this week from 11.11% last week. This decline coincides with a surge in support for Malaysia Airlines, which captured 64.84% of Trip.com's new bookings this week. The preference for Malaysia Airlines highlights the competitive pressure facing Etihad. Re-establishing Etihad’s presence with Trip.com could help stabilize this relationship and counterbalance the competitive shift towards direct competitors.

Agents Requiring Attention

Polani Travel

Polani Travel has shown some variability in its support for Etihad Airways. Its cumulative average share stands at 4.62%, which is below Etihad's average share with the travel agency community (5.3%). This week, Etihad’s share through Polani Travel increased to 5.50%, indicating a recovery from a lower 1.10% share the previous week. However, despite this improvement, Malaysia Airlines remains a dominant partner for Polani, capturing 60.55% of the agent’s new bookings this week, up from 56.91% last week. The consistent preference for Malaysia Airlines suggests that Polani Travel’s customers value direct connectivity, posing a challenge for Etihad to retain share in the face of such competition. A targeted focus on re-engagement with Polani could help close this competitive gap and be worth a modest £13k per annum in additional revenue.

Travel Up

Travel Up continues to be a challenging partner for Etihad, with a cumulative average share of just 0.70%, far below Etihad's average share with the travel agency community (5.3%). This week, Travel Up did not allocate any new bookings to Etihad, down from a small 1.59% share in the previous week. During this time, Singapore Airlines has maintained a strong presence, securing 11.02% of Travel Up’s bookings this week. The steady preference for Singapore Airlines highlights a competitive dynamic in which Etihad is struggling to gain traction. Addressing this gap will require a focus on understanding the factors driving Travel Up's allocation towards competitors. When this is achieved, it is expected to generate an additional £116k in revenue per annum.

Gold Medal Travel

Gold Medal Travel has been a difficult partner for Etihad, consistently showing low support. The agent’s cumulative average share for Etihad stands at just 0.40%, with no new bookings in either of the past two weeks. This lack of engagement contrasts sharply with the support other airlines receive, such as British Airways, which has maintained a 38.89% share of Gold Medal’s new bookings this week. For Etihad, re-establishing a presence with Gold Medal could be pivotal in tapping into this segment and challenging dominant competitors, whilst adding an additional £53k in revenue per annum.

Aviate Management

Aviate Management presents another area of concern for Etihad, with a cumulative average share of 2.73%—well below Etihad's average share with the travel agency community (5.3%). This week, the agent provided no bookings for Etihad, following a similarly low 1.59% share the previous week. Qatar Airways, meanwhile, captured 30.0% of Aviate’s new bookings, indicating a preference for Doha-based connections. The ongoing disparity in support suggests a need for Etihad to explore avenues to enhance its appeal with Aviate, particularly in countering the competitive positioning of Qatar Airways. This would be worth a modest additional £10k per annum in incremental revenue.

Trailfinders

Trailfinders has shown a relatively low level of engagement with Etihad, with a cumulative average share of 2.77%, below Etihad's average share with the travel agency community (5.3%). This week, Trailfinders directed 2.50% of its new bookings to Etihad, down from 8.33% the previous week. During this period, British Airways captured 38.33% of Trailfinders’ bookings, a sharp increase from 18.75% last week. This shift towards a dominant competitor like British Airways underscores the challenges Etihad faces in maintaining a competitive edge with Trailfinders. Addressing these dynamics will be crucial for improving alignment with this agent and would generate an anticipated incremental value of £93k per annum.