The new fare structure, which provides more choice and clarity, would come into effect from September 14, Etihad Airways said in a release.
At the same time, as part of the new baggage policy, the charges levied on the excess baggage will be cut by up to 90 per cent on majority fares.
Under the revised structure, Etihad Airways customers will get a total of eight new 'Fare Choices', allowing them to tailor their bookings to their individual needs, it said, adding it makes the booking procedure transparent.
Additionally, an adapted baggage policy will provide guests with a more standardised baggage allowance structure across the Etihad Airways partner network, while also reduce the price for excess baggage charges on most routes, it said.
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"In most industries there is a move towards allowing customers to tailor and customise their experience, and ours is no different. When it comes to booking a flight, not everyone's needs are the same. Some guests want to travel light and on a budget, whilst others want to be able to make last-minute travel decisions, carry extra baggage...," Etihad chief commercial officer Peter Baumgartner said.
"The structure for economy class includes economy breaking deals, economy saver, and economy value and economy freedom. Similarly, business class includes business breaking deals, business saver and business freedom, while in first class there will only be one fare family - freedom," the airline said.
On some routes the cost of buying an additional 23 kg piece of baggage will be reduced by up to 90 per cent, with a further reduction of up to 30 per cent if pre-purchased directly with Etihad Airways up to 24 hours before travel, it said.