Etihad Airways slims waist on way back to the black

July 27, 2018 10:15 am


Etihad Airways has all but given up on a head to head competition with Emirates Airlines for sky supremacy in the region and beyond.

And that’s a smart move on the path to profitability from red numbers plaguing the Abu Dhabi-based national carrier since 2016.

A recent sale of aircraft, announcements that it would drop destination lines, and consolidation of business units, project a new direction under recently-appointed (Jan 2018) Etihad Airways Group Chief Executive Tony Douglas, and financial way back to the black.

Related: Etihad Airlines makes a slight recovery, reduced losses in 2017

Fleet sale

Airways said it was in the process of selling a fleet of five A330-200(F) jets, as recently reported by Zawya.

“The widebody freighters were withdrawn from service effective 1 January and have been placed into storage in Abu Dhabi Int’l and Teruel ever since,” |away said Ch-Aviation.com reported.

An Etihad spokesperson told Ch-Aviation.com that the five aircraft were “in advanced stages of being sold to a new owner” but did not give further details about the buyers or the cost of the transaction.

Etihad ‘s freighter fleet currently comprises five B777-Fs, all of which are used on flights connecting the UAE capital Abu Dhabi with India, the Far East, China, Sub-Saharan Africa, North and South America, and Europe.

The restructuring process undertaken by Abu Dhabi-based Etihad has so far entailed the trimming of both its route network and its fleet.

“Aside from the sale of the A330 freighters, Etihad has also retired its five B777-200.

Saj Ahmad, Chief Analyst – Strategic Aero Research, told AMEinfo that Etihad is clearly making better and more effective use of cargo space on its 777-300ER and 787-9 fleets, dispensing the need to have the payload-constrained A330 Freighters.

“Etihad will retain its 777F’s given the inherent commonality with the rest of its 777 fleet, but the A330F has been a poor selling airplane and an even worse performer at hauling cargo where it’s battered by the supreme efficiency and economics of the bigger 777F,” Ahmad said.

“So it’s no surprise Etihad wants to offload them. Not only will it cut Etihad’s capital and operational expenditure, cost saving measures like these will pave the way for the airline to get into the black. More sweeping changes are needed and in time, Etihad’s management will likely engage in measures to slash costs, drive up efficiency and become profitable.”

Read: Etihad’s clever PR stunt latest among daring Arab airline campaigns

Restructuring

Recently-appointed Etihad Airways Group Chief Executive Tony Douglas said recently that Etihad was becoming “more rational” and would not shy away from dropping routes that were commercially unsustainable, as reported by Reuters.

After years of rapid expansion, Etihad plunged to a loss in 2016 and has been restructuring since.

Reuters reports that Etihad has reorganized into seven business units directly reporting to Douglas, as opposed to individual businesses operating under a group structure set up by his predecessor, James Hogan, who left months earlier as a strategic review got underway.

“Some senior and mid-management employees will lose their jobs and others will be moved into new positions,” Douglas told Reuters by phone, declining to disclose the number of jobs likely to be affected.

Video: Chat and smiley with Etihad Airways on Whatsapp

He added that many thousands of people had left since the restructuring process began in 2016, but that job cuts were no longer a major focus for the group and that the reorganization was about improving operational efficiency.

Etihad currently employs around 23,000 people.

Reuters says that under Hogan, Etihad spent billions of dollars buying stakes in other airlines as it sought to transform Abu Dhabi into a major hub like Emirates has done for Dubai.

“Etihad is now focused on point-to-point traffic to destinations where passengers want to visit Abu Dhabi, and not just fly through it,” Douglas told it.

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Hadi Khatib
By Hadi Khatib
Hadi Khatib is a business editor with more than 15 years' experience delivering news and copy of relevance to a wide range of audiences. If newsworthy and actionable, you will find this editor interested in hearing about your sector developments and writing about it.



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