Etihad Airways: reputation management: an example of Eyjafjallajokull Iceland volcano
Etihad Airways in the national airline of United Arab Emirates. From its formation in 2003 to 2011, Etihad has grown its fleet size to 62 aircraft that serve 72 destinations in 47 countries.
Like all international airlines, Etihad is no stranger to unpredictable crises, and has had to deal with successive challenges arising from SARS pandemic in 2003; the global recession from 2008 to 2011; the H1N1 pandemic in 2010; the Iceland volcanic eruption and resulting cloud in 2010; the extreme weather in the United Kingdom in ate 2010 and more recently the earthquake and tsunami affecting Japan in March 2011.
The 9/11 attacks in the USA and SARS were estimated to have cost the airline industry over US$25 billion. According to former IATA Chief Executive the industry lost US $9.4 billion in 2007 as a result of the global recession. Still more recetnly in 2010, the first three days of Eyjafjallajokull volcanic eruption in Iceland resulted in revenue losses of US $ 400 million each day for airlines. At one stage during the crisis it was estimated that 20% of the global aviation and 1.2 million passengers a day were affected by the airspace closure ordered by European governments. The entire event, which lasted over a week, led to over 100,000 flights being grounded and caused an estimated loss of more than US$1.7 billion for the aviation industry.
The Iceland volcano took the aviation industry by surprise when the main eruption on 14 April 2010 sent pulverized volcanic rock, ash and glass shards as high as 11,000 meters into the atmosphere. Iceland can be avoided on most glight paths but what complicated matters was that Eyjafjallajokull lay under a jet stream. A jet stream is a narrow stream of strong concentrated winds extending from 10,000 to 40,000 feet above the ground. This resulted in a plume of volcanic ash being blown towards Europe as strong speeds of about 400km per hour expanding at a width of 50 to 100 kilometers. This scattered ash reduced visibility. Volcanic ash in the past was known to cause jet engines to stall and could affect sensitive electronics and scratch glass. This case documents how Etihad as an organisation successfully managed a crisis that took the whole aviation industry by surprise.