ETIHAD AIRWAYS 12
Assessmentof Employee Relations in
Oneof the key drivers of business or company success is good employeepolicies. Employees are the ultimate representative of a company ororganization, since they project the company’s image to thecustomers. They drive the sales, offer the ‘moment of truth’experience when customers or potential clients first make contactwith the company, handle customers’ grievances, provide informationregarding the market dynamics to the employer, source for the largerpercentage of business intelligence data on behalf of the employer,and ultimately drive company performance. If employees aredissatisfied, it is impossible for the company to make progress inany front, and particularly so in a competitive market segment inwhich service delivery is dependent on customer service. This paperwill focus on the employee relations in in UAE,particularly with regard to the role that employee management hasplayed in the company’s performance in the last decade since itsinception in 2003.
EtihadAirways, which is the National Airline in the United Arab Emirates,is one of the fastest growing airlines in the world. The airline thatwas established by the Royal decree in 2003 and fully based in AbuDhabi started its activities at the end of 2003. Since its firstcommercial flight at this time, Etihad airline has continuouslyrapidly expanded its operations, thus making the firm to be able toadd at least one route on month up to the end of 2004 (Cento,2008).In 2011, the airline serves approximately 17 destinations in Europe,Asia, and Middle East among others destinations. As a part of itsgrowth plan, Etihad airlines has included other aspects like openingoffices to the Etihad International networks and growing workforcethat includes approximately 70 nationalities. As indicated by Hanlon(2012),the airline operates at least 1300 flights on weekly basis to 85cargo and passenger destinations in over 55 countries, and a fleet of66 Airbus as well as Boeing aircraft. In 2011, the firm was able totransport over 8.3 million passengers, which indicated 17% growth ascompared to 2010. As a result of this, the revenue of this firm grewby 13% to US$ 4.1 billion translating to a net income of $14 million(EtihadAirways, 2012).As of 2014, the airline employs more than 19,000 employees globallysourced, with 1,700 of these having been hired in 2014 alone.
Inaddition to its improved performance, the airline has earned theaward of being the World’s Leading Airline for three consecutiveyears, since 2009. In addition to the core business of transportingpassengers, the firm has also invested in other areas such as EtihadCargo and Etihad Holidays, thus raising its operational portfolio. In2010, ethos ranked it as the world’s second best airline afterEmirates. The table below shows the results.
InDecember 2011, the airline indicated that, it had taken 29.2% stakein Air Berlin, which is the sixth largest airline and James Hogan wasappointed as the Vice Chairman. Later, the firm was able to acquireminority stake in other airlines. Some of them include AirSeychelles,AerLingusand VirginAustralia where ownership is 40%, 2.987% and 10% respectively (EtihadAirways, 2012).As argued by Cole(2013), thephenomenon growth, which has been witnessed in this firm, isattributable to the enormous need to create a sales force, whichstood from other competitors in every global market. As the nationalairline in the UAE, the company has the vision of reflecting the bestof the Arabian hospitality, which includes aspects like generosityand culture among others and seeks to raise this image in otherdestinations across the globe. The goal is to be a well- establishedglobal airline and changing the convections of the entire airlinehospitality. To achieve this, has integrated various strategies,which enhances safe as well as environmentally friendly ways oftravelling (EtihadAirways, 2012).
StrategicPerformance Drivers in Etihad
Etihadperformance is based on sound strategic formulations in several areasincluding those of formation of strategic alliances with otherairlines, good customer management policies, const managementpolicies, and, importantly, employee management policies. The airlinehas both pros and cons as far as employee relations are concerned. Ithas made great milestones in this area, but still has a great roomfor improvement with regard to the same. The section below willexpand on the issue of employee relations (Cole,2013).
Employeerelations in a company is a multi-faceted employer-employee interfacecutting across human resource policies, employment terms andconditions, employee rights and responsibilities, channels ofcommunication, grievance handling, employee reward and recognition,and motivation among other variables. This assessment will look atemployee rights and duties, human resource policies, as well asmanagement relations in the .
EtihadHuman Resource Policy
Etihadhas embarked in a comprehensive employee improvement program aimed atcontinually equipping its employees with skills that will help themto not just deliver their services better, but also stand goodchances of career progress within and outside their currentemployment. In 2014, the company has won the MENA HR ExcellenceAwards for Employee Learning and Development championship(Zawya, 2014).The Airways has satisfied the Award’s rating for the best companyin terms of employee learning, career progression and performancemanagement through its globally competitive learning and developmentinitiative. To win this award, the airline has instituted acomprehensive employee improvement scheme backed by a dedicatedemployee management corporate academy opened in 2014 which offersdedicated courses to 275 people per day. In Etihad, all employeesregardless of rank attend courses for management efficiency, with2,822 employees including graduate managers having attended variousshort term courses in the first three months on 2014. The airways hasa Management Effectiveness Program in place, which has alreadyenrolled more than 1,200 people managers throughout its offices inthe world to improve their skills. Therefore, with respect toemployee learning and development, the company has a justified win inachieving the trophy so awarded.
Etihadis committed to ensuring a good employee health follow-up. The Medical Center is the airways’ healthcare hub whereall employees are encouraged to seek timely medical intervention, aswell as regular medical checks and period screening. The centerreported more than 37,000 visits in 2012 alone. In addition, varioushealthcare campaigns have continued to improve employee health. Onesuch campaign is the breast cancer awareness and screening campaign.A mobile treatment unit is available for breast cancer, as well asother medical conditions. The company also offers proactive treatmentfor all conditions such as lung cancer, hepatitis vaccinations, fluvaccinations among other conditions. The airways also emphasizes onall employees’ physical fitness through a dedicated fit2fly fitnesscenter where employees attend to keep fit. This is a good motivationeffort by the company to encourage workers, as physical fitness is anessential property of employee health and satisfaction. In 2012, morethan 1200 employees participated in the voluntary checking andscreening to check cholesterol and blood sugar levels. The airlinehas also incorporated a childcare unit for employees who wish tomonitor their young ones periodically without being absent from work.This also helps to reassure the parents, as they are aware theirchildren are in good care and within their reach (Cole,2013).
Occupationalsafety is another key area of employee relations in modern companies,as most countries already have in place mandatory workplace safetydemands. Good companies therefore are expected to not just meet butactually exceed these requirements. have a dedicatedemployee safety policy laid out in the company’s human resourcedocuments. To this end, the airline has attained the ISO/OHSAScertification, which is the highest such award for workplace safetyin the business arena globally. Operational safety for the airwaysinclude dedicating sufficient flight hours for trainee pilots,provision of state of the art flight simulators for student pilotsduring training, and the company’s regular assessment by the IATAOperational Safety Audit every two years to ensure that equipmentused by employees is fate for operation to avoid exposing them torisk.
TheEtihad airways have been variously reported as one of the airlineswith the best employee retention histories in the aviation sector.Currently, the airways has close to 20,000 employees in its worldwidenetwork. has the largest percentage of employeeshaving served the maximum number of years, which is ten(PayScale, Inc,2014).Earlier in the year, the company hosted an event to show appreciationfor employees who have been in the company since its inception in2003. The table below illustrates the distribution.
Etihad Employees Years of Experience
Less than 1 year
20 years and more
Thecompany also has attractive job packages as well as other fringebenefits to attract employees to retain their job. As at 2013, acaptain’s salary starts at Dh 35,200 equivalent to $ 9,578. Thissalary is within the range of top world airlines as at the time. Inaddition, an annual increment of 2% in the first three years ofservice. There are other benefits that employees are entitle to,including meal allowances, flight allowances, family andresponsibility allowances among others. For a basic pilot position,the flight duty allowance is Dh 50 hourly. The employee is also givena meal allowance ranging between Dh12- Dh23 depending on thecontinent or region of work. The company also has a very favorableemployee housing arrangement called ‘Rent to Buy’ in whichemployees can purchase the house they occupy under friendly financeoptions given by the employer. In the alternative arrangement, anemployee gets up to Dh 170,000 annually in house allowance. Thismakes it possible for employees to enjoy comfortable living spaces, adistinguishing factor between Etihad employment and other comparableairlines (Cole,2013).
Etihadalso has a policy for covering employees’ education. A pilot has aneducation allowance of Dh 36,000 for primary school education andDh50,400 for secondary education. A maximum of four children arecovered in the insurance arrangement.
AnnualLeave and other Benefits
Theairline recognizes employee rights for annual leave, as well as otherrights entrenched in the national labor framework. Employees areentitled to an annual 42 days leave or payment in forfeiture, as wellas employee travel benefits that cover the bulk of travel expenses,as well as competitive retired benefits. In recognition of the natureof careers in the aviation industry, the company also has in place anaccident and life insurance policy to help employees and/or theirdependants in cases of risk occurrence. Thus, the company has offeredits employees a suitable employee benefit package that is likely toattract them to remain in employment (Cole,2013).
Pilotsworking the airline are entitled to at least 8 days of rest in amonth, which is as much a company policy as it is an industry demandin line with IATA regulations for air service safety. Nevertheless,the quality of work-rest balance for the majority of the airline’semployees is satisfactory.
Thecompany, however, had come under criticism in 2010 for its lack ofpension agreement with employees, only giving them 35 days worth ofpay per year worked at the end of the career service. This means, forinstance, that a pilot who has worked with the airline for 10 yearswould be entitled to ten salaries of 35 workdays each. Thisarrangement is arguably not up to the company’s class, especiallyconsidering that it is still a global leader in air service deliveryand that employees are every bit behind this perfect rating. It isimportant that almost every variable against which an airline’sefficiency is rated has to do with a service, and that an employee’smotivation is the biggest determinant of the quality of that service(Cole,2013).
Inaddition, employees are hardly ever allowed the full extent of theirleave days in a year due to the shortage of employees. The airline iscurrently flying more than 40 countries and to more than 70destinations. This huge network, which has placed the airline rightat the top of global air service giants, has also put it underimmense pressure to increase its workforce. In the meantime, somecategories of employees, especially pilots, have been exposed tostrenuous conditions with regard to annual rest arrangements.
Anothercriticism initially advanced against the airline is with regard toemployee privacy. For the employees residing within the employeehousing, especially the lower cadre workers who are on call, therewere complaints that the level of privacy accorded employees wasunsatisfactory, with round the clock surveillance by security agentsin the housing facilities being regarded as more than necessary.There were also concerns that employees were not allowed visitorswithin the facility, as well as that the level of screening done wasalmost embarrassing (Cole,2013).
of employee relations for
EtihadAirways is one of the leading global airlines based in the UAE. Thecompany shows a good cross cultural, cross ethnic diversity in termsof employee recruitment. It has no reported cases of employeediscrimination, stigmatization or other forms of employee bullying.Thus, the level of employee-employee relations is satisfactory.
Thecompany has one of the best employees learning and developmentprograms in the aviation industry, enabling workers to acquireknowledge within their job roles to enable smooth transition in theircareer progression, as well as acquisition of skills to enable thempursue successful careers out of Etihad. The development of dedicatedtraining academies for the airline’s regions is a strong employeeempowerment policy.
Theairline has a good employment health and relaxation arrangementthrough its state of the art gym and fitness centers where employeescan work out and remain healthy. In addition, the company has a goodhealthcare plan for all employees, including regular medicalcheck-ups, screening for common ailments likely to cause terminalproblems, as well as mobile check-up programs to suit the employeeshift based work programs.
Theemployee benefits and remuneration is within the industry average,but not outstanding. Employees are allowed the key privilegesincluding daily shift allowances, meal allowances and travelallowances. They are also given major cover such as educationalallowances for primary and secondary education for their children.The company, however, lacks a pension arrangement, a factor likely toaffect the employees’ long term benefits from their employment. Theissue of worker freedom is also a significant challenge for theairline’s employee relations score-card. Overall, the company’semployee relation standards are good, a factor that has helped itstay at the top of competition in the aviation sector.
Cole,A. (2013). Analysisof the .GRIN Verlag, 2013. Available at
PayScale, Inc(2014). AverageSalary for Employees.Available at
Zawya(2014). Etihadairways honoured for employee learning and development at MENA HRexcellence awards 2014.Available athttp://www.zawya.com/story/Etihad_airways_honoured_for_employee_learning_and_development_at_MENA_HR_excellence_awards_2014-ZAWYA20140515150038/