Government-backed UAE flag carrier makes surprise entrance as new long-haul player

The battle between the Gulf carriers will intensify in November with the launch of Abu Dhabi-based Etihad Airways, which has been designated the United Arab Emirates' national flag carrier and will compete directly with Emirates and Gulf Air.

Owned by the government of Abu Dhabi, which holds a one-third share of Gulf Air, Etihad has been set up under the orders of UAE president Shaikh Zayed, who is the ruler of Abu Dhabi.

"We are completely independent of Gulf Air and will be in competition with it," says Etihad's manager of communications and product development, Richard Bate. Asked about the contradiction inherent in Abu Dhabi having ownership roles in two competing carriers, Bate says: "This is true, but it's an area I'm not at liberty to comment on."

The emergence of Etihad Airways as a new long-haul player with government backing has led to speculation that Abu Dhabi might give up its equity stake in Gulf Air to focus on its own airline.

Etihad's business plan reveals the extent to which it will be competing for the same routes as its rival. It will start operations on 12 November using two Airbus A330-200s leased from Brazil's TAM on services to Beirut and Cairo, followed shortly afterwards by Karachi and Mumbai. Four more A330s will arrive next year when the airline will add London services as well as Bangkok, Jakarta, Kuala Lumpur and Manila.

Bate says Etihad Airways is not positioning itself "as a premium airline as such" but has no plans to operate a low-cost subsidiary to compete with Gulf Air's Abu Dhabi- based low-fare operation Gulf Traveller or Sharjah-based Air Arabia.

Source: Flight International