Shocking (But Not): Etihad Will No Longer Have Their Own Lounge In London

Etihad has been undergoing a huge amount of cost cutting the past couple of years. The airline went from spending money like there’s no tomorrow, to saving money like they won’t be around tomorrow. This came after they made some very bad investments, and arguably also didn’t necessarily make the most prudent financial decisions with their own operations either (which you can read about in this post).

Etihad’s single biggest station outside the UAE is London Heathrow. For so many airlines London is the most premium market in the world, and Etihad operates three daily A380 flights between Abu Dhabi and London.

For a couple of weeks now there have been rumors of Etihad handing over control of their lounge at London Heathrow to a third party. While Etihad has gone to some pretty great lengths to cut costs, this seemed especially extreme for a station as important as this.

This change has now been confirmed. Etihad’s London Heathrow Terminal 4 Lounge will become a No1 Lounge by the end of the week. We shouldn’t expect much change in terms of the furnishings since it doesn’t sound like the lounge will be closing for any amount of time. Rather it sounds like we should expect changes to the soft product.

Obviously this move is being done so Etihad can cut costs, which raises the question of how this move will cost cuts for the airline. First of all, presumably the airline is going from just covering all of the costs of the lounge, to instead paying the lounge operator for every guest who visits the lounge.

My guess is that some or all of the following changes will occur:

  • The selection of food and drinks will be made significantly worse
  • The Etihad employees in the lounge will be fired, and will be replaced by contract employees
  • The lounge will be contracted out to other airlines and potentially even Priority Pass members, meaning that the lounge could be significantly more crowded

It’s possible that they’ll continue to offer better food and drinks in the hours leading up to Etihad flight departures. It’s also possible that they’ll require Etihad premium cabin passengers to flash their boarding passes for premium drinks, or for access to a la carte dining. I also wonder what they’ll do for passengers in the Residence.

This isn’t even the first airport in the UK where Etihad has shut down their lounge. Earlier this year they handed over their Manchester lounge to the airport. I can’t help but wonder how many other lounges Etihad plans on dumping around the world.

If they can’t justify it in London, which is their most premium market with three daily flights, that can’t be good news for Los Angeles and Washington, for example, where they have at most one flight per day.

This isn’t as huge of a deal as it may have been in the past, though. As Etihad cost cuts at lounges around the world, the level of differentiation offered by the lounges decreases as well.

For example, last year Etihad closed their Six Senses Spa inside the Heathrow Lounge. Furthermore, globally they’ve greatly been cutting back on the quality of food and drinks in lounges, including eliminating signature cocktails and a la carte dining in many lounges.

What do you make of Etihad’s decision to hand over their LHR lounge to No1 Lounges?

(Tip of the hat to Head for Points)

Comments

  1. The lounge will become a dump and overcrowded just like every other No. 1 lounge I have been to. It will almost certainly become a priority pass selection, as most if not all No. 1 lounges are. It is a shame to see the airline with the residence go like this. Is it bad that I want to see them collapse spectacularly in the future?

  2. There’s nothing premium about the other No 1 Lounges in London.

    If they close their London lounge I don’t see the point of them maintaining keeping any other lounges open outside AUH.

  3. They invested a huge amount in a lounge at LAX too which offers an excellent product

    As far as I’m aware it’s only available to customers flying on etihad or Alitalia, meaning it’s closed most of the time as their flights depart within an hour of each other

    No1 lounges are open to everyone at a fee

  4. Hi Ben,

    Re: “The Etihad employees in the lounge will be fired, and will be replaced by contract employees,” that might not happen. We have laws to protect employees when a company outsource’s a service. The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). In short it usually means employees have to be taken on by the new employer on same terms and conditions as if they were still working for the old employer.

    There might be some legal arguments as to why TUPE does not apply but that will be for NO1 lounge to argue about!

  5. @ John there are no Etihad staff at Heathrow apart from possibly a station manager. They are entirely handled by a third party

  6. @Icarus – it won’t actually matter who employs them. The TUPE protections are based on the job they do and where they do it, so the staff should hopefully be fine.

  7. @Icarus – HI Icarus – As Seat1c said it does not matter on who employs them – all that matters is the job they do/service they delivery.

  8. I find it really strange how airlines like MH & GF can have their own lounges in LHR & make them work, BUT an airline like EY cannot. Go figure!
    I am really unsure who they’d use if they did go & close their SYD & MEL lounges as they don’t have many options to choose from.
    It’s truly a shame as Etihad as a brand & airline was impeccable a few years ago & then they started all their cost cutting & their service & product has gone down free-fall, including loosing loyal frequent flyers & guests.
    Personally, I will not pay for a mediocre product, when the competition is truly fierce!

  9. If I may suggest a little correction to the headline:

    Etihad Will No Longer Have Its Own Lounge In London

    While people use “Their” as a gender-neutral pronoun when writing about people, it really makes no sense to apply it, as here, to an airline. Etihad is simply a singular neuter company.

  10. I hope this could mean that Qantas swoops on their space in MEL & relocates the Qantas international business lounge there from the ‘dungeon’!

  11. We flew First with them at Xmas LHR-AKL and the London lounge was a disappointment. The food was rubbish, drink was not premium. So no loss there.

  12. @ David

    Depends. British English is much more open than US English on this point: depending on the circumstances a reference to a corporation can be either singular or plural and still be “correct”.

    Though I’m always mystified why some people feel the need to point out hard-and-fast grammar “rules” which, it usually turns out, are nothing of the sort. Especially if the meaning is, as here, completely unambiguous.

    As a general rule, English is not particularly consistent but it is sufficiently flexible that meaning is usually clear. Isn’t that enough?

  13. Update from Business Traveller:

    “- The lounge will also continue to be used by the premium passengers of a small number of other airlines and, subject to availability, will be available for purchase by passengers of other airlines.
    – From launch, guests will enjoy a new, white-linen dining experience and a more extensive bar service, including freshly squeezed juices and smoothies, world coffees and a more sophisticated wine list.
    – Over the next year, the lounge will be reconfigured to include new lounge areas, bar, dining room, and reading room, as well as upgraded showers and prayer rooms. The new bar will also offer a comprehensive cocktail and mocktail list.”

  14. @ David

    Never trust ignoramuses on spelling, specially if raised and customized in the US. All government agencies & private companies are plural in English ( whether US slang follows is another matter ), thus Her Majesty’s Government have elections every so often, the Police are to help public order, EY were an excellent company & Lufthansa are to grow further market share. On a sidenote, the United States are a world power both because of this rule & because of their name in plural.
    Citizens & privates can speak about themselves in plural, Kings and Queens always in plural, Presidents and PMs depending on their power and command of good English.

  15. What a shame, I’ve used the Manchester lounge and although small was great. Looks like Etihad are going out of business

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