Etihad Gives A380s Luxury Touch to Muscle In on Gulf Rivals

May 04, 2014 9:22 am ET

(Updates with full seating layout in 10th paragraph, CEO’s comments on Air Serbia outlook in 12th, Indian stake from 13th.)

May 4 (Bloomberg) -- Etihad Airways PJSC said its Airbus Group NV A380s will target travelers seeking privacy and new levels of luxury when the jets join the fleet in December, months or years after flying with other premium carriers.

Etihad will fit the superjumbos with what it says will be the industry’s largest first-class suites to help compete with Gulf rivals Emirates and Qatar Airways Ltd. and other top-end operators such as Singapore Airlines Ltd. and British Airways.

“We’ve taken the concept of private jets and put them into the A380,” Etihad Chief Executive Officer James Hogan said today in Abu Dhabi, announcing that the planes will serve New York, London and Paris, together with Sydney and Melbourne in Australia -- cities that already have extensive A380 links.

Etihad will become the 14th airline in the world to operate the A380 when its commences flights on Dec. 27, and has 10 of the double-deckers on order. While Emirates of Dubai and Doha- based Qatar don’t fly the model to Abu Dhabi, they do operate it on the same intercontinental transfer routes Etihad will target.

Emirates has had the A380 since 2008, with almost 50 in the fleet and a total of 140 on order, while Qatar will take its first three jets within a month of each other in June, with initial destinations including London, Paris and New York.

Butler Service

The Etihad planes will be fitted out in a three-class layout, with nine first-class “apartments” on the upper deck that Hogan said will be 74 percent bigger than currently, with a full-flat bed and separate reclining lounge-style seat.

Each A380 will also have an individually-styled cabin branded “The Residence” and featuring a double bedroom, separate living area and a shower room, with a dedicated attendant trained at the Savoy Butler School, he said.

“We believe there’ll be a strong market for the Residence and Apartment,” the executive said. “It’s compartmentalized and can be used by families and government delegations, so you can charter that part of the aircraft. In that regard it’s better than private jets.”

The superjumbos will feature 70 so-called “studios” in business class,’’ a concept that will be also introduced on Etihad’s Boeing Co. 787s, which will feature 28 studio seats, together with eight “first suites” arranged around a unique curved aisle, Hogan said. The carrier is the No. 1 customer for the 787, a smaller wide-body than the A380, with 71 on order.

The A380s will also feature 417 seats in economy class, making 498 in total.

Indian Election

Hogan said that Etihad’s focus this year will be on profitability. The No. 3 Gulf carrier’s net income rose 48 percent to $62 million last year, aided by revenue of $820 million from code-share and equity partners that funneled long- haul transfer passengers via Abu Dhabi.

The CEO declined to comment on the state of talks with Italy’s Alitalia SpA, his latest investment target. Air Serbia, in which Etihad took a 49 percent stake last year, should break even in 2014, he said.

Hogan said there’s no reason why any change of government in India after a general election there should lead Etihad’s investment in Jet Airways to unravel, adding that it’s “not a political issue” and positive for connectivity and jobs.

“We have full confidence in the Indian process,” he said. “I’ve got no doubt that whichever government is in power it will continue to support their own aviation policy.”

Etihad ruled out establishing a dedicated low-cost arm and said that there are no plans to set up any kind of subsidiary carrier in other Gulf Cooperation Council countries.