Etihad flying high
Etihad Airways reported on Thursday 22% improvement in its core operating performance in 2017, driven by rising revenues and reduced costs.
dubai — Etihad Airways reported on Thursday 22 per cent improvement in its core operating performance in 2017, driven by rising revenues and reduced costs.
The Abu Dhabi-based carrier said the achievement is significant despite facing challenges including significant fuel cost increases, the entry into administration of its equity partners Alitalia and airberlin, and initial investment in a comprehensive business transformation programme.
The airline, which carried 18.6 million passengers and 552,000 tonnes of cargo, said it could record 7.3 per cent reduction in unit costs, despite $337 million adverse effect from fuel prices.
The airline, which has been overhauling its strategy since 2016 with changes to top management, dropping unprofitable routes, and retiring operationally costly aircraft, increased revenues from core operations by 1.9 per cent to $6.1 billion (2016: $5.9 billion), while reducing losses in the core operations by $432 million to $ 1.52 billion (2016: loss of $ 1.95 billion). “Results published for 2017 are for core airline operations and exclude any extraordinary or one-off items; 2016 figures have been restated to show a like-forlike comparison,” the carrier said in a statement.
Mohamed Mubarak Fadhel Al Mazrouei, Chairman of the Board of Etihad Aviation Group, said the airline continued to be a key driver of Abu Dhabi’s vision to develop its tourism sector, grow commerce and strengthen links to key regional and international markets.
“This was a pivotal year in Etihad’s transformation journey. The board, new executive leadership team and all our employees worked extremely hard to navigate the challenges we faced. We made significant progress in driving improved performance and we are on track in 2018,” said Al Mazrouei.
Tony Douglas, Group Chief Executive Officer of Etihad Aviation Group, said the carrier made good progress in improving the quality of revenues, streamlining cost base, improving our cash-flow and strengthening our balance sheet.
“These are solid first steps in an ongoing journey to transform this business into one that is positioned for financially sustainable growth over the long term. I would like to thank our people for their hard work and dedication in 2017,” said Douglas.
He said it is crucial that the carrier maintain this momentum, retaining talent and attracting leading professionals from around the world to work alongside highly-skilled UAE national workforce. Saj Ahmad, chief analyst, StrategicAero Research, said much of the continued losses stem from the airline’s prior investments in Alitalia and Air Berlin. “However, reducing the losses by a quarter to $1.5 billion seems commendable, it does mean that Etihad still has a very long way to go before getting into the black.”
“With underlying revenue growth flat and passenger growth stagnating, based on current performance, it might take at least another 3-4 years before Etihad is profitable – this is irrespective of whether it curtails it capital expenditure on new airplanes like the A350 family and 777X or cutting back on less profitable routes,” Ahmad told Khaleej Times.
Peter Baumgartner, Chief Executive Officer of Etihad Airways, said the airline’s transformation process has delivered tangible results to-date, with a significant improvement in performance for 2017.
“Passenger yields for the last quarter were up a very healthy 9 per cent versus the same period a year before. On-time performance was at record levels and operationally we continue to drive down costs without compromising on safety or quality across all areas of the business,” said Baumgartner.
“The major driver to becoming a more agile and efficient organisation, resilient in a very competitive landscape, is our continued investment in skilled professionals, technology and digital innovation, which is going to allow us to become smarter, faster and even more responsive to the everchanging needs of our customers, making Etihad the airline of choice. These developments are at the heart of our transformation strategy,” said Baumgartner.
Etihad Airways received 12 new aircraft in 2017, including two Airbus A380s, nine Boeing 787-9 Dreamliners, and an Airbus A330F. These aircraft replaced 16 older Airbus A340, A330, A319passenger and A330F cargo aircraft, which exited operations, thereby reducing the average fleet age to just six years.
— issacjohn@khaleejtimes.com