Etihad to fix economy ticket prices monthly

29/07/2015 07:55 AST

Etihad Airways on Tuesday said it will determine ticket prices for its economy class on monthly basis in line with a new fuel pricing policy of the UAE government.

The move comes after the Ministry of Energy last week announced that fuel prices would be deregulated and would be linked with average global prices, with the addition of marketing and distribution costs.

Asked to speak on the removal of fuel subsidies, an Emirates airline spokesperson said the move in the UAE will have minimal impact on the cost of operations at Emirates and the group as a whole.

"This is because jet fuel is not subsidised in the UAE and the main areas of operations that fall under the airline rely on jet fuel. Emirates sources its jet fuel at current international prices," the spokesperson said.

Saj Ahmad, chief analyst at London-based StrategicAero Research, said that Etihad Airways is acutely aware that pricing is a key determining factor for travel and its largely prevalent for economy fares as passengers look for the most value to suite their budgets.

"By reviewing pricing each month, not only do passengers benefit from swifter price reductions on the back of falling fuel costs, but Etihad also gains by passing on cost savings and attracting passengers that would otherwise be lost to competitors," Ahmad told Khaleej Times.

"While economy class passengers have far lower yield value, they do comprise a sizeable proportion of volume so it's definitely a smart move on Etihad's part to develop its pricing with more fluidity than before."

Khaleej Times