Etihad revises business-lounge strategy at Heathrow

Abu Dhabi-based Etihad Airways will outsource its dedicated business lounge at London Heathrow Airport to an external supplier and open it up to passengers from other airlines, under a model that will be extended to other outstations.

“The project begins at London Heathrow, where Etihad Airways’ lounge will be rebranded ‘The House, home of Etihad Airways and other leading airlines.’ The scope of the new lounge brand may be expanded to include other lounges,” Etihad Airways said in a statement.

Etihad selected UK-based specialist No1 Lounges to take over the operation of its Heathrow lounge, following an extensive tender process. The two companies have been working together over the past year to develop the new product.

“No1 will gradually take over the other lounges outside Abu Dhabi as well,” an Etihad Airways spokesman told ATW.

Over the coming year, the Heathrow lounge will be revamped to include new lounge, bar, dining and reading areas, as well as upgraded showers and prayer rooms.

Lounge access will continue to be complimentary for Etihad Airways’ first- and business-class passengers, high-tier frequent flyers and codeshare passengers traveling in premium cabins.

However, Etihad will now also sell ad-hoc lounge access to economy passenger—traveling with Etihad or other airlines. “Non-Etihad guests will only be able to use the lounge in the new set-up outside Etihad flight times and/or if capacity permits it,” the Etihad spokesman told ATW.

Etihad Airways VP-guest experience and delivery Linda Celestino said this strategy means Etihad can maintain its brand presence, while opening the lounge to a wider audience. No1 Lounges CEO Phil Cameron said the shared lounge is a “much more effective operating model,” while Etihad said it will allow “better utilization” of the facilities.

This marks the latest change to Etihad’s product, following a turbulent few years, marred by financial difficulties at several of the group’s equity partners.

During the last two years, Etihad has rolled out a series of trials aimed at tapping digital technologies, increase customer choice and diversify revenues. The airline has experimented with several new ancillary products including extra legroom, neighbor-free and preferred seats, as well as hand-luggage-only fares.

This article first appeared on Air Transport World on 8 Oct. 2018