Table of Contents

Cover letterIndustry overviewCompany profileTarget consumerExecutive summaryVision MissionPhysical shop on-board; flight shopsStrategySwot analysis Perceptual map MerchandisePolicyLaunch and PR

James Hogan , CEOP.O.Box 35566 , Head Office, Khalifa City A United Arab Emirates

Dear Mr. Hogan,

The following will contain brief plans for the opening of a physical shop on-board that will boost company revenue and will help support the image of Etihad Airlines as a leading modern luxury airline. Shopping through the on-board catalogs have been lagging and reinforcing the products through an on-board shop will ensure the increase of sales.

I have included my research in the following pages for your review and have great confidence that you will see why I am so passionate about this project. I hope you will consider the potential of my proposed ideas.

Please contact me if you have any further questions and/or comments as it is my pleasure to do business with you.

Sincerely Gabrielle Alvarado-Powell

The international airline industry provides service to virtually every corner of the globe, and has been an integral part of the creation of a global economy. The airline industry itself is a major economic force, both in terms of its own operations and its impacts on related industries such as aircraft manufacturing and tourism, to name but two. Few other industries generate the amount and intensity of attention given to airlines, not only among its participants but from government policy makers, the media, and almost anyone who has an anecdote about a particular air travel experience.

Industry Overview

Today, the global airline industry consists of over 2000 airlines operating more than 23,000 aircraft, providing service to over 3700 airports. Even with relatively conservative expectations of economic growth over the next 10-15 years, a continued 4-5% annual growth in global air travel will lead to a doubling of total air travel during this period.

The recent growth of low-fare air travel options combined with a reduced willingness on the part of business travelers to pay the higher air fares charged by network carriers played a major role in contributing to the poor financial performance of traditional net-work airlines, both in the US and in many other countries.

Etihad Airways began operations in 2003, and in 2013 carried 11.5 million passengers. From its Abu Dhabi base Etihad Airways flies to 111 existing or announced passenger and cargo destinations in the Middle East, Africa, Europe, Asia, Australia and the Americas.

It now employs over more than 20,000 employees from 142 nationalities, over 125 countries around the world.

Company Profile

The airline has a fleet of 105 Airbus and Boeing aircraft, and more than 200 aircraft on firm order, including 71 Boeing 787s, 25 Boeing 777-X, 62 Airbus A350s and 10 Airbus A380s. Etihad Airways holds equity investments in airberlin, Air Seychelles, Virgin Australia, Aer Lingus, Air Serbia and Jet Airways, and is in the process of formalising equity investments in Alitalia and Swiss-based Etihad Regional

Target Consumer

Etihad passangers are diverse ethnically and come from different backgrounds. They are mostly business men and women, workers, tourists and expats who are travelling to and from the Middle East to over 63 destinations. Etihad offers economy, business, first and residential class seating to their passengers. Passengers will come from different social status and income ranges.

The on-board shopping area will be available to all passangers and will feature items that are affordable but will also carry exclusive luxury items for the more affluent passengers. We will carry an assortment of products that will suite and enhance the customer’s lifestyle and travel experience.

Etihad Airways was established by Royal (Amiri) Decree in July 2003. It commenced operations in November 2003 and has developed into one of the fastest growing airlines in the history of commercial aviation.

Executive Summary

Vision“The airline seeks to reflect the best of Arabian hospitality -cultured, considerate, warm and generous - as well as enhance the prestige of Abu Dhabi as a centre of hospitality between East and West. Our goal is to be a truly 21st century, global airline, challenging and changing the established conventions of airline hospitality”

“To give a refreshing welcoming to their guest, where travel should be safe and secure in an environment that is friendly, and where global standards in both terms is practiced, be it hospitality or in the technical aspects in assuring a safe journey for its guests”

Mission

Flight Shops Airlines have seen a decline of on-board sales which are promoted through screens and catalogs offered to passangers. Delta Airlines, for example, has dismissed the program all together due low sales volume. However, other airlines, such as Korean Air, have figured out a way to increase their sales through sacrificing 13 possible seats to create a physical store on-board.

“Some successful airline programs earn $100-$200 million, even more, in annual revenues from duty-free alone. The opportunity for onboard retail is growing, not shrinking.”

Korean Air has reportedly sold $200 million through their on-board duty free shops in 2014

Business Strategy

Critical Success Factors• Employ on-board sales associates and merchanding team with

special retail training• Build effecient and visually appealling shop structure • Have constant revenue from product placement, static and

video advertising• Reliable checkout options• Exciting merchandise

• on-order planes will be easily manipulated to house flight shops

• existing foot traffic provided by passangers

• sure revenue from advertising space

• attention getting, adds to features • adds to passanger experience

• no prior experience in on-board retail shops

• loss of potential seats, less passangers

• carry inventory=fuel spent• no returns, after purchase services• salary of retailer added to costs• merchandise insurance increase • cost of manipulating aircraft

• sales potential added to ticket sales• Etihad becomes a brand • complete lifestyle package • all passangers can add to sales

revenue• brand’s to buy into the shop • collaborations with brands

• safety of passangers when shopping and sudden turbulence

• other airlines have already adapted this program and may be competative

High Price

Low Price

Low Quality

High Quality

Merchandise

To offer a unique experience, the merchandise on each plane will vary according to the destination from Abu Dhabi.

For example, if the plane was destined to leave Abu Dhabi for Greece, our merchandise mix will carry Greek inspired items that are genuine to the culture. This way, the shop will carry on the theme of the journey and will immerse shoppers in the culture before they even set foot in Greece. The return flight will carry the same assorment and will be helpful for those who have forgotten to bring something back with them.

All flights will carry standard merchandise such as Etihad items, brands that have paid to advertise with us and select Arabic inspired items made in Abu Dhabi that will promote the country.

Merchandise

To ensure the accessability and organization of the flight shops, we must require passangers to visit according to their seating zones. Having too much foot traffic in the flight shops will lead to a negative shopping experience. We want to create a very welcoming and relaxed atmosphere for our shopper. By giving the shoppers an alotted time to visit the shop, it will create a sense of urgency for them to make the purchase faster. Of course, business, first and residential class can come to the store at their convenience as part of their ticket package.

Catalogues will still be provided for those who would like to remain in their seats and shop traditionally. This will help us reduce high levels of foot traffic in the flight shops.

Policy

Launch

A launch party will be held in honor of the flight shops and will be hosted in Abu Dhabi. It will be sponsored partly by the brands that what to participate in the fligh shops and will feature local and international celebrities. Executives will be present to further answer questions given by the audience and reporters.

Etihad will also feature an on ground mock up of the store that guests can walk into and take pictures that they can post on social media. A press release will be issued prior to the launch. We will have to create a hashtag that will fit the event. #cantstopshopping, #etihadshopping

We will have a select few members of staff attend the event as a way of thanking them for their servitude and assuring employees that Etihad is a raising star with all the innovation the company invests in.

Etihad to Create Retail Experience at 30,000 ftFor Immediate Release

Etihad Airways is proud to announce another innovative experience to their passangers. Flight Shops are said to launch this month and Etihad is hosting a launch party to celebrate another segment of their growing business.

Abu Dhabi, UAE

Etihad will be hosting a launch party that will celebrate the addition of another experience offered to their passangers. Sponsors of the event will be featured in the on-board fligh shopping. The launch party will be taking place in the Emirates Palace with a mock up of the flight shop to be viewed by guests. Etihad is prepared to dismiss 13 of its economy seats to make room for the flight shop. The company will be selling exclusive merchan-dise, designer collaborations as well as Etihad branded items. For further information, please contact our head of public rela-tions below:

Gabrielle Alvarado9178039448amg@etihad.com

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