There’s no denying that the Gulf carriers are under an immense amount of financial pressure, and we’ve seen a bunch of cutbacks. Their respective governments don’t have unlimited money, so these airlines are having to make changes in hopes of becoming independently sustainable long-term.
Etihad has probably been doing the most cost cutting of the “big three” Gulf carriers, and they’ve just announced their latest cost cutting initiative, which they claim is “based on customer feedback.”
Etihad is cutting complimentary chauffeur service
Etihad will be discontinuing complimentary chauffeur service globally for first & business class passengers as of July 3, 2017, with the exception of their Abu Dhabi hub. Previously most first & business class passengers received complimentary chauffeur service on arrival and departure, though clearly the airline weren’t getting much of a return on that investment.
Etihad Residence chauffeur drive in Abu Dhabi
Etihad will continue to offer complimentary chauffeur service on arrival and departure for passengers traveling in the Residence, though aside from that, complimentary chauffeur service will only be available in Abu Dhabi. Etihad will be replacing this with “a paid option at specially negotiated rates in all other cities,” which will also be available to economy passengers. Furthermore, Etihad Guest members will be able to accrue miles on their chauffeur bookings. I haven’t seen the new prices published yet, though I suspect they won’t be that compelling, and certainly not better than Uber in markets where it’s available.
First & business class tickets issued prior to July 3, 2017, will have the chauffeur service honored, though tickets issued after that date are subject to the new rules.
Here’s how Mohammad Al Bulooki, Etihad’s Executive Vice President of Commercial, justifies these changes:
“Etihad Airways is constantly looking at ways to improve its value proposition for guests, focusing on the service elements that are most important to them. This change is being put in place as the airline looks to evolve its product proposition while continuing to match individual customer requirements. Following a review, the chauffeur services we offer will be amended globally, with the exception of Abu Dhabi, where there are a high number of users of the service.
“Many customers prefer to make their own ground transportation arrangements. The decision by Etihad Airways to change its offering has been taken to provide increased choice and to ensure fares remain as low and as competitive as possible, while retaining best-in-class service for all guests, in all cabins.”
This isn’t the first cut that Etihad has made to their chauffeur service. Last August Etihad cut complimentary chauffeur service for first & business class passengers on partner award tickets.
Etihad is expanding purchased lounge access
Last month I wrote about how Etihad began selling access to their Abu Dhabi first class lounge, clearly in an effort to boost ancillary revenue.
Etihad First Class Lounge Abu Dhabi
Etihad has now announced that all Etihad passengers can buy access to all of their lounges globally:
“On the ground, premium class guests can enjoy free access to Etihad Airways’ collection of outstanding lounges. By offering paid access to Economy Class guests, these signature lounges can now be enjoyed by all who desire to experience our award-winning facilities.”
Etihad has been doing a lot of cost cutting in their lounges, as I recently outlined. While their lounges are physically beautiful, the food and drink selection has been cut back significantly in some cases. I can’t blame them for this move, really.
Etihad will let you pay to have an empty seat next to you
In a further effort to boost revenue, Etihad is introducing a new “Neighbour-Free Seat” option in economy. Guests can bid to have up to three empty seats next to them, and that will be confirmed up to 30 hours before departure. This is a smart concept in general, though I do wonder a bit about the logistics:
- It may be tough for other passengers to understand that they can’t move to one of those seats, given that it’s empty
- Some passengers who bid on empty seats may feel resentful when they realize a flight is mostly empty, though I don’t see anything wrong with that; you’re paying for the certainty of the empty seat near you
You can soon bid to have an empty seat next to you in Etihad economy
Bottom line
This is just the next step in a big cost cutting trend at the Gulf carriers. Am I happy to see these changes? Of course not. But at the same time, I am happy to see the Gulf carriers headed in a more sustainable direction, where they might actually be around long term.
The Gulf carriers typically have among the lowest pricing in business class, so I doubt they were getting much of a revenue premium for the chauffeur service. Most business travelers can also expense airport transfers, so I can see why they cut this. Again, I don’t like to see it, but I also can’t blame them.
I’ll be curious to see if Emirates follows…
What do you make of Etihad’s latest changes?
Tried the bidding system in Economy so we could have a spare seat between us. Paid £89 each way to guarantee this. Unfortunately it was a waste of money as they only seem to offer it when the plane is only half full. We could have had a whole row for nothing
Though the chauffeur ride is no longer free I don't think that will affect things much. Business travelers who are used to airport transfers by chauffeur are used to the service and typically love it so much that they won't give it up because the free option is out. Even a high-quality service like Cars Exec at https://www.cars-exec.com/ is more affordable than people might think (and they cover just about every location across the UK).
One related topic but one not covered here is that of using a Irish chauffeur service for transport about the United Kingdom. Many people, in particular corporate executives, do not wish to use public transport or traditional taxi services when they are in the United Kingdom. They instead prefer the privacy, exclusiveness and class of a chauffeur service. The site http://vipchauffeurservice.co.uk describes why employing a private chauffeur service for London airport transfers or even to...
One related topic but one not covered here is that of using a Irish chauffeur service for transport about the United Kingdom. Many people, in particular corporate executives, do not wish to use public transport or traditional taxi services when they are in the United Kingdom. They instead prefer the privacy, exclusiveness and class of a chauffeur service. The site http://vipchauffeurservice.co.uk describes why employing a private chauffeur service for London airport transfers or even to tour UK locations works out much better for them and can be more affordable than most people assume.
This has been a major reason for my choice of Etihad when booking long haul business class trips. I will now look elsewhere.
They also quietly abolished their business class amenity bags in Business class earlier this year too!
Sven, maybe you are right in regards of Germany. However, in Australia they are not the cheapest, and from other comments it doesn't seem they are in many other places.
So perhaps the general rule is they are not value priced, but as is often the case there are exceptions.
Emirates still has their chauffer service, so far. I've used it not just in Dubai, but in other cities such as Houston and Bangkok as well.
And Schar correct, Emirates is one of the pricier options for business and first, even to Europe and Asia.
Finally, Emirates turns a good profit, you can see for yourself on their publicly available financial statements.
@ schar: While you are right in regard to flights out of LAX - at least after just a quick research - you are not when it comes to the prices of Emirates and Etihad in general. Business class tickets from here in Germany to South-east Asia sell for as low as 2400 roundtrip and shouldn't go up more than 3000
"The Gulf carriers typically have among the lowest pricing in business class"
-uh...in what universe? Emirates & Etihad have one of the most expensive business class fares..expect to pay at least 7K for a roundtrip LAX-DXB.
I just hate the way they communicate these changes as though they are based on customer feedback. Pulling the free chauffer service is not done to "increase choice". I get the economics of why they need to do it, I just don't understand why they feel the need to spin lies in the process.
Whilst the economic realities are starting to hit the Middle Eastern carriers, the fact is that their hard product is still very, very good - new airplanes, spacious business class seating, great IFE, innovations like on-board bars and lounges etc etc. So what if they are cutting back on the quality of booze in lounges, offering paid access to lounges and restricting chauffeur flights? The reality is that they will still offer a much better...
Whilst the economic realities are starting to hit the Middle Eastern carriers, the fact is that their hard product is still very, very good - new airplanes, spacious business class seating, great IFE, innovations like on-board bars and lounges etc etc. So what if they are cutting back on the quality of booze in lounges, offering paid access to lounges and restricting chauffeur flights? The reality is that they will still offer a much better business class than legacy carriers like BA, their fares are competitive and, as they fly from regional airports in the U.K., connecting to Asia and Australasia via the Middle East is far more convenient than having to connect via traditional hubs like Heathrow, Frankfurt or Paris.
Yes it's a shame that the Gulf carriers are cutting back but the reality is that, even with the cutbacks, they are still way ahead of BA (my national airline) for pretty much all long-haul flights with the exception of those to the Americas, where the Middle East's geography naturally disadvantages them.
@ Chandan Bhat: Even before that decision there was no chauffeur service for discounted business fares (definitely not for "Business Saver")
@chandan - The discounted biz fares were never eligible for the free chauffeur service to begin with, so no change there.
The only bad piece of writing is the Etihad VP's statement as it is full of jargon: "value proposition" / "product proposition" etc.
Emirates won't follow. They didn't make huge failed investments into other airlines
@Hosea
He's not happy to see it personally, but he's glad they are trying to be more sustainable in their operations. This is my interpretation.
I agree with you this doesn't really affect business travellers since they normally expense the cab/car service to/from the airport and get reimbursed anyways.
It iwll be tricky as well to have those empty confirmed seats when a fligiht suddenly becomes overbooked.
So if your flight is mostly empty and you just happen to have a whole row to yourself in economy (without having gone through the empty seat bidding process), I wonder if they'll still let you stretch out, or if they'll say you can't since you didn't purchase those seats.
Well there goes my hopes of flying Etihad business or first! I want to do it just so I don't have to drive to the airport!
Most US airlines have an unadvertised policy that allows you to buy a neighboring seat. It's usually under the umbrella of reserving a seat for an instrument or being a "passenger of size"
I believe they give you a second boarding pass you can place on the seat to make it clear to others that you paid for it.
Seems time has proven US carriers argument right : pax only care about lie-flat seats, low prices and an appearance of upscale service. Only a lobotomized individual would buy the argument F class customers prefer navigating all the hurdles in place to determine which transportation provider is most reliable in each market flown.
I second Chris's post. Keep up the interesting articles, Ben!
No mention of Qatar or the fact that they do seem to run a sustainable operation whilst making a profit. Obviously that would go against the numerous posts you've made on this blog - and can obviously never admit you're wrong
Here we go with the grammar/style police and then the people who defend Lucky as if he is sitting in a corner crying over the comments... It's exhausting.
I like the empty seat bidding. When I fly ULCCs in the U.S. I like to buy-up to rows in which there are no people (because ULCC patrons rarely buy-up in my experience), but that is sometimes a gamble. I like the idea of having a guaranteed empty seat. The FAs as you pointed out need to enforce it.
Ben, I just wanted to say thank you for your awesome blog. I enjoy it every day. Lately I've seen so many "haters" commenting on your use of verbiage, being too detailed in a 10 picture review, etc. It's really disappointing to see these comments so sending you some positive energy your way. :) Keep doing what you are doing.
@ Hosea -- Writing a blog isn't as easy it looks.
@Danny,
The writing here is so painful. "Am I happy to see these changes? Of course not. But at the same time, I am happy to see the Gulf carriers headed in a more sustainable direction..."
This happens so often. "Is thing good? No, but also equally yes." It's like starting an essay with "Asia is a land of contrasts" or "Webster's defines".
Love the idea of having empty seats next to me.
Please, please, use only one "wow" per week.
This bid for an empty seat looks interesting.... how do you think the bidding system will work? Same as upgrades? How much will be charged to purchase this service and chauffer do you think?
Surprising since chauffeur service was one of the few things that gave etihad an upper hand over qatar airways. Still sad to see this go, since even smaller carriers like Oman Air offer Chauffeur service. It wouldve been more appropriate if they had cut business class chauffeur service for Discounted and Promo fares. I also dont get the logic for cutting chauffeur service for First Class passengers. Sucks.
I was planning a trip in business class for the end of this year but I don't plan to book my flight until august. This is a real bummer for me as I was hoping I could experience the chauffeur. I really hope that the prices will be considerate and not over the top.