Partnerships help boost Etihad’s bottom line
After turning its first profit in 2011, the eight-year old carrier has reported that its net profit tripled in 2012 to $42m compared with $14m in the previous year.
The airline said its partnerships and codeshares contributed more than $600m to its overall revenue, which climbed 17% in 2012 to $4.8bn from $4.1bn in 2011.
Over the past 14 months, the carrier has taken minority equity stakes in Virgin Australia and Aer Lingus and raised its shareholding in Air Berlin and Air Seychelles. The airline is also reportedly close to finalising a deal to invest in India’s Jet Airways.
“This has been a game-changing year for Etihad Airways,” said James Hogan, the airline’s president and CEO. “We have delivered improved net profit, the second consecutive year we have been in the black, a remarkable achievement given the youth, ambitious growth and ongoing investment made by this airline in a challenging global economic environment.”
“We have taken great strides in building the industry’s first ‘equity alliance’, with our investments in airberlin, Air Seychelles, Virgin Australia and Aer Lingus, which are contributing significant value to our business.”
The national carrier of the UAE said it exceeded the 10 million passenger mark for the first time last year, with its fleet of 70 aircraft carrying 10.3 million travellers. The company also says its profit result was boosted by a 5% reduction in non-fuel costs relative to its capacity.
Last year the carrier began flying to six new destinations – Tripoli, Shanghai, Nairobi, Lagos, Ahmedabad and Basra. It has also announced new flights to Washington, Amsterdam, Sao Paolo and Ho Chi Minh City for 2013.
Planned fleet upgrades for 2013 include 14 aircraft, with 11 passenger aircraft deliveries and three freighter deliveries. To fund its further expansion, the carrier has received more than $6.8bn in investment from more than 50 institutions.
Aviation analyst Saj Ahmad said Etihad’s results exceeded his expectations. “I had envisaged a small doubling of profits but Etihad jumped beyond that – to me this demonstrates that their diverse policy of inorganic growth via partners as well as natural organic growth is paying some pretty sweet dividends,” he told AMEInfo.com.
“The biggest takeaways for me were the 23% rise in passengers contributing to a 17% rise in revenue. Translated, this not only means that Etihad is growing the amount of people it flies but it’s also strengthening its financial position as well. Overall, this is a great set of results and silences many who think that GCC carriers are artificially sustained – Etihad’s results prove otherwise,” he added.