Etihad Airways: Rethinking Internationalization and Growth

by: Mukund R. Dixit, Sanjay Kumar Jena

Publication Date: July 14, 2020
Length: pages
Product ID#: 1-368-110

Core Disciplines: International Business, Marketing/Sales, Strategy & Management

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Third place winner in WDI Publishing’s MENA Case Writing Competition “Doing Business in the Middle East North Africa Region”, sponsored by Michigan Ross Executive Education.

This case presents a situation faced by Tony Douglas, CEO of Etihad Airways, a government-owned, full-service airline. It is February 6, 2020, and Douglas is reviewing the progress he has made in turning Etihad around and charting a direction for its future. The key strategic options are: 1) Contracting and turning Etihad into a regional airline, 2) reshaping Etihad as a low-cost carrier (LCC), or 3) continuing to operate Etihad as a full-service, internationally-focused airline. Additionally, the company could form an alliance with its closest competitor, Emirates Airline.

Created in 2003 with a mandate to operate “safely, commercially, and profitably,” Etihad positioned itself as a luxurious airline and pursued aggressive internationalization and growth. It was the second national airline in United Arab Emirates (UAE) after Dubai’s Emirates Airline. Etihad’s initial strategy was directed by CEO James Hogan, and while the company was profitable for many years, it began incurring losses in 2016.

The case provides quantitative and qualitative information to enable students to evaluate Etihad’s strategy and performance and make recommendations for its future.


Teaching Objectives

After reading and discussing the material, students should:

  • Understand a growth and internationalization strategy, particularly as initiated by a new entrant into a mature sector like aviation.
  • Delineate how a late entrant with sufficient resources can commit to specific positioning and growth strategies through equity investments in established players.
  • Recognize the difference between organic and inorganic modes of growth and determine the vulnerabilities of equity joint venture growth strategies.
  • Diagnose reasons for a company’s performance changes, develop critical strategic options for the future, and recommend a turnaround strategy.
  • Construct a market review of competitors in the aviation sector.