The move cements Etihad's relationship with Smart, which has been handling the carrier's PR in the country since the airline first launched its service to Tehran late last year.
Smart will now be responsible for advertising, PR, sales promotion and direct marketing within Iran. Dubai-based TBWA\Raad handles the airline's advertising across the rest of the region.
Behdad Najafi Asadollahi, managing director of Smart, said the account was rewarded for the agency's successful PR work for Etihad, adding that the agency would now consolidate both above and below-the-line activity for its client through an integrated marketing communications package.
Etihad, which is one of the world's fastest growing airlines, recently rolled out its first ever global TV campaign in a bid to boost brand awareness in key markets such as Australia, Europe and the wider Middle East.
The TVC, which was created by TBWA\Raad and shot entirely in the UAE, was the first part of a two-phase marketing drive, which saw the commercial backed by print and outdoor, including a signature outdoor execution on the M4 motorway in the UK. The second phase will be launched in September.
Smart Marketing Solutions is one of Iran's leading full-service agencies, although the country's overall market remains relatively under-developed.