Company optimistic of fast Covid-19 recovery
▶ Airline had 3.5 million passengers and a 71% load factor in first half
Etihad Airways said its first-quarter performance registered a 34 per cent year-onyear improvement and the airline was “progressing well ahead of its transformation plan targets,” before Covid-19 brought air travel around the world to a halt.
“Etihad faced a set of enormous and unpredictable challenges in the first six months of the year,” Tony Douglas, chief executive of Etihad Aviation Group, said yesterday.
“We started 2020 strong and recorded encouraging results as part of our continuing transformation programme. This left us in a relatively robust position when Covid-19 hit, allowing us to act with agility and to mobilise all available resources as the crisis deepened, taking major steps to reduce costs through a wide-reaching series of measures.”
The Abu Dhabi airline had its best set of monthly results to date in February, before the pandemic led to the closure of borders.
It carried 3.5 million passengers during the first half, down 58 per cent from the same period last year, with a seat load factor of 71 per cent.
Etihad recorded a $758 million (Dh2.78 billion) loss in the first six months of its financial year, compared to $586m in the same period a year ago. Firsthalf revenue fell 38 per cent year on year to $1.7bn.
The state-owned airline grounded its fleet and reduced wages after the UAE suspended regular passenger flights in March to curb the spread of the virus.
During the first half, Etihad reduced operating costs by 27 per cent to $1.9bn.
In May, the airline said it cut jobs in several areas of its business, joining other global operators in taking tough measures to slash costs amid the crisis.
The Etihad Aviation Group, which employed 20,369 people at the end of last year, did not say how many people were made redundant or in which departments.
“While we have revised our outlook for the rest of 2020 based on current realities, we remain optimistic that as international borders re-open, we will increase our flying and carry more guests securely,” Mr Douglas said.
“By September, we aim to increase our worldwide flights to half our pre-Covid-19 capacity.”
Even as restrictions begin to lift in some countries, chief executives of major airlines, trade bodies and analysts in the aviation industry said that it may take several years for air travel demand to recover to pre-pandemic levels.
According to Moody’s Investor Service, demand will not return to pre-crisis levels until the end of 2023, and only if effective vaccines and medicines are available.
Etihad Airways restarted passenger flights in June and said it planned to fly to 58 destinations in July and August.
It intends to operate at about 45 per cent of its pre-pandemic capacity this month.
Amid the health crisis, Etihad and Sharjah budget airline Air Arabia proceeded with plans for a new low-cost carrier in Abu Dhabi.
Air Arabia Abu Dhabi began operations last month with two routes to the Egyptian cities of Alexandria and Sohag.
It will today begin flying to Afghanistan’s capital Kabul and Dhaka in Bangladesh from its base at Abu Dhabi International Airport.
During the first-half, general and administrative expenses dropped by 21 per cent to $400m, driven by “management cost containment initiatives and reduced operations”, the airline said.
Cargo revenue increased by 37 per cent year on year to $490m as demand grew and cargo fares rose.