Etihad Airways revenue at Dh31B
dubai — Etihad Airways on Thursday said it slipped into the red, posting Dh6.86 billion ($1.87 billion) losses due to one-off impairment charges, losses in fuel hedging and exposures to equity partners.
The airline had posted Dh378 million profit in the previous year.
Impairments totalled Dh6.97 billion, including Dh3.89 billion charge on aircraft due to lower market values and the early phase out of certain aircrafts. It also posted a Dh2.96 billion charge on assets and financial exposures to equity partners, mainly related to Alitalia and airberlin, the airline said in a statement on Thursday. The Italian carrier filed for a bankruptcy in June.
The Abu Dhabi-based carrier’s revenues also fell from Dh33.1 billion in 2015 to Dh30.68 billion last year, a decrease of 7.3 per cent.
Mohamed Mubarak Fadhel Al Mazrouei, chairman of Etihad Aviation Group, said: “A culmination of factors contributed to the disappointing results for 2016. The board and executive team have been working since last year to address the issues and challenges through a comprehensive strategic review aimed at driving improved performance across the group, which includes a full review of our airline equity partnership strategy.”
Ray Gammell, interim group CEO of Etihad, said the group continues to implement changes across the group as part of the comprehensive strategic review, with a focus on improving revenues and reducing costs.
As part of its restructuring and cost-cutting measures, Etihad Airways last year announced jobs cuts in some parts of its business. Refusing to disclose the number of redundancies, the airline had said that the restructuring involved different parts of its business in order to reduce costs and improve productivity and revenue. In January, Etihad Group had announced that James Hogan would step down as president and CEO of the company in the second half of 2017. “During
The board and executive team have been working since last year to address the issues and challenges Mohamed Mubarak Fadhel Al Mazrouei, Chairman of Etihad Aviation Group
2016, the airline commenced a ‘Right Size & Shape’ programme that generated total overhead savings of four per cent through headcount reductions and other measures by the end of the year, even as capacity and total passenger number increased. This year is just as challenging for the global aviation industry and the everevolving competitive environment is likely to impact overall performance in 2017. However, our airline business remains strong and class-leading, and as an aviation group, we are in a stronger position,” said Peter Baumgartner, CEO of Etihad Airways.He said the industry is characterised by overcapacity, declining market sizes on key routes, and changing customer behaviour as a weak global economy affects spending appetite.
“Operationally, we performed well in 2016. We maintained load factor levels even as we increased capacity. Yields were under pressure in all cabins, with business class impacted particularly as corporate travel policies continued to encourage flyers to downgrade to Economy,” he said, adding that “our fuel hedging positions, which helped manage fuel spend during the oil price boom, yet significantly impacted our cost base last year, will taper during 2017. We are also seeing promising improvements in the contribution made by our ancillary revenue strategies, and we expect those to offset some of the yield declines.”
The group said in a statement that its core airline business achieved steady passenger revenues of Dh18 billion by handling 18.5 million passengers, achieving load factor of 79 per cent. Its cargo business witnessed a slight improvement in freight carried at 595,519 tonnes uring 2016.
— waheedabbas@khaleejtimes.com