Etihad signs new deal, records best-ever Q3
ETIHAD Airways reported revenues growth of 39 per cent to $1.1 billion (Q3 2010: $ 785 million) on passenger numbers up 18 per cent to 2.25 million (1.9 million) in the airline’s strongest ever third quarter. Seat factor increased by 3.8 per cent to 80.7 per cent, the highest quarterly result in its history. Operating costs rose 12 per cent, on a 12 per cent rise in capacity, while non-fuel costs rose only seven per cent. The airline has 81 per cent of its fuel hedged for the rest of 2011.
According to James Hogan, Etihad Airways’ chief executive officer, 2011 was a strong year and witnessed growth in all key commercial indicators despite the continuing challenges of high fuel prices and economic downturn in many of the markets in which Etihad operates. This was achieved by marketing the world’s leading air travel product, while maintaining a rigorous focus on costs.
“Our third quarter results were the best in the company’s history as we reported revenue growth of 39 per cent and moved into operating profitability. Six new aircraft were added to our fleet this year, enabling Etihad to build greater depth into its schedule and increase weekly frequencies to key markets including Paris, Manchester, Milan, Geneva, Brussels, Bangalore, and Manila.
We began to flying to new destinations including the Maldives (from November 1), the Seychelles (November 2), Chengdu in China (December 15) and Düsseldorf (December 16)” said Hogan.
The airlines recently purchased of a 29.21 per cent stake in airberlin, Europe’s sixth largest airline, a deal which brings to 269 the total number of destinations it serves, either directly or with partner airlines. The announcement means Etihad Airways now offers guests a route network more than 80 destinations larger than that offered by any other Gulf carrier.
Hogan explained, “Today more than ever, it is vital to think differently in this industry. This new partnership expands our network reach, gives us access to 33 million new passengers, and provides us with a real opportunity for global growth. Through airberlin, we gain immediate access to a broad and complementary European market, with outstanding connectivity options for customers of both airlines. Together the companies generate more than $ 9billion in revenues.
“We estimate each airline could achieve incremental revenues of between €35 million ($45 million) and €40 million ($52 million) just in the first year, and we believe the partnership has enormous potential to unlock a range of efficiencies.”
Etihad currently have a portfolio of 34 quality airline partners, but the new partnership with airberlin is the first equity investment in another airline.
Looking ahead, Hogan believes that their toughest challenge will be to move into sustainable profitability in 2012. “We are heading in the right direction and are on track to deliver a continuing financial return to our shareholder” he said. Speaking about the unrest in the region, Hogan explains that airlines are used to dealing with crisis situations, be they natural or manmade. “In recent years there have been a number of examples including the volcanic ash crisis and the devastation caused by the Tsunami and subsequent nuclear meltdown in Japan. Civil unrest in the region this year has affected all airlines but the UAE remains a safe and stable destination.
Connectivity over Abu Dhabi is one of the major selling points of this Middle East hub, which continues to grow in popularity.”
“Despite this difficult economic situation, we remain on track to boost our passenger numbers in 2012, by providing good value, great connectivity and exceptional service on the ground and in the air. As the airline grows and matures, and as we take delivery of more aircraft, we’ll obviously be looking to expand our operations in key markets. In 2012 specifically we will launch new routes including to Shanghai, Nairobi and Tripoli,” he continued. Seven new aircraft will enter service in 2012; three A320s and four B777-300ERs.
On board, qualified first class chefs have just been introduced to London, Sydney, Melbourne and Paris, and will be progressively introduced across all other first class destinations by early 2012. Hogan adds, “By doing so we continue to challenge industry standards and find new ways to bring a fine dining restaurant experience to our guests, both on ground and in air. These chefs will also contribute to menu development for both lounges and flights.”