Etihad Airways posts first-ever net profit

JEDDAH: Etihad Airways, the fastgrowing carrier of Abu Dhabi, has posted a net profit of $14 million for 2011, exceeding its goal of breaking even for the first time ever, a statement received here said.

The UAE carrier said its revenues were up 36 percent last year to $4.1 billion.

“The record result exceeded the airline’s 2011 target, which was to break even,” the statement said.

The carrier transported 8.3 million passengers in 2011, up 17 percent from the previous year, with an average seat factor of 75.8 percent.

Earnings before interest, tax, depreciation, amortization and rentals (EBITDAR) stood at $648 million, while earnings before interest and tax only amounted to $137 million.

Etihad posted $1.72 billion in revenues for the first half of 2011, up 28 percent on the same period of 2010.

“This is an historic day for Etihad Airways and an amazing achievement for an airline just eight years old,” said James Hogan, president and chief executive officer of Etihad.

“Five years ago we said we would be profitable by 2011. Despite the global financial crisis, continued high oil prices, regional instability and natural disasters, we have delivered,” he said. Etihad began operations in 2003. Hogan said cost control, excluding fuel, has contributed to saving $187 million annually, adding that the carrier’s “management culture is that of a low-cost airline.”

The airline also hedged more than 80 percent of fuel costs in 2011, while the figure for 2012 is currently at 75 percent. Hogan said that “in spite of the tough global economic environment,” the carrier would aim for strong growth this year, targeting passenger traffic of 10 million and “a corresponding increase in profits.”

In December, Etihad increased its stake in Germany’s second-largest airline airberlin to 29.21 percent, with an investment of 72.9 million euros ($95 million at the time of announcement).

As part of ther deal, Etihad undertook to arrange for debt financing totalling $255 million for airberlin.

“This was a game-changing move for Etihad Airways, adding 157 destinations and giving us access to 35 million new passengers,” Hogan said.

“The airberlin deal will be our most important catalyst for growth in 2012. It has given us instant access to Europe’s largest travel market, and will have a major impact on revenues in 2012, with an expected contribution of up to $50 million,” he added. Last month Etihad announced signing a memorandum of understanding with the government of the Seychelles to acquire a 40 percent stake in Air Seychelles for $20 million.

The carrier will also provide a shareholder’s loan of $25 million to meet working capital requirements and support network development, it said. Hogan told a press conference that although the carrier “continue to monitor opportunities,” it did not have any partnership deals in the pipeline.

Etihad’s boss also said the carrier that is owned by the deep-pocketed Gulf emirate was not currently considering going public.

“We continue to run as a private company,” he said, adding that there were no directions from the shareholders to prepare for an initial public offering.

Etihad serves 83 passenger and cargo destinations in the Middle East, Africa, Europe, Asia, Australia and North America, with a fleet of 65 Airbus and Boeing aircraft.