ETIHAD Airways reported a full year EBIT (earnings before interest and tax) of $137 million on revenues up 36.0 per cent to $4.1 billion (2010: $2.98 billion). The results included earnings before interest, tax, depreciation, amortisation and rentals (EBITDAR) of $648 million, with a net profit of $14 million. The record result exceeded the airline’s 2011 target, which was to break even.
James Hogan, president and chief executive officer of Etihad Airways, said: “This is an historic day for Etihad Airways and an amazing achievement for an airline just eight years old.
“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. Everything we said we would do, we have done. Now, we move into the next phase of our development whereby we deliver consistent, sustainable profitability. Given the challenges faced by the industry, our combination of revenue growth and entry into profitability must be one of the best results of any airline in 2011.
“And we will aim for strong growth again in 2012, in spite of the tough global economic environment, with a passenger traffic target of 10 million and a corresponding increase in profits.”
Highlights of the 2011 result included: 8.3 million passengers, up 17 per cent on 2010 (7.1 million); an average seat factor of 75.8 per cent, nearly two percentage points higher than 2010 (74 per cent); a growth of available seat kilometres from 45.2 billion (2010) to 51.0 billion, up 13.0 per cent; the addition of five new routes – Bangalore, the Maldives, the Seychelles, Chengdu and Düsseldorf; Etihad Crystal Cargo revenues up 25.7 per cent to $651 million ($518 million) on tonnage up 17.8 per cent to 310,188 tonnes (263,313 tonnes); an increase in total aircraft departures, from 57,534 to 62,735, with a technical dispatch reliability of 99 per cent; and eight new codeshare agreements, taking Etihad Airways’ codeshare partners to 35 airlines, which increased its worldwide network to 259 destinations – more than any other Middle East air carrier.
Hogan says Etihad Airways’ successful partnership strategy intensified, with its first equity investment in another carrier – airberlin, Europe’s sixth largest airline, which was announced in December 2011. “This was a game changing move for Etihad Airways, adding 157 destinations and giving us access to 35 million new passengers.
“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.
“And of course, 2011 marked the first full year of Etihad Airways’ strategic partnership with Virgin Australia, which offers 45 destinations in Australia and the Pacific, and boosted revenue by 700 per cent over what we achieved with our previous Australian airline partner.
“We will continue to look at opportunities in 2012. Already this year we have announced a second equity investment, in Air Seychelles, which is an important step towards growing our operations in the increasingly popular leisure markets of the Indian Ocean and Africa,” said Hogan.
Hogan said cost control had been a significant contributor to the airline’s profit, with costs per available seat kilometre (CASK), excluding fuel, being cut by 4.6 per cent in 2011 and 16.6 per cent over the last two years, representing annual savings of more than $187 million.
The airline also continued its policy of fuel hedging, which has protected the airline from the volatility of oil prices. More than 80 per cent of fuel costs were hedged in 2011, while the figure for 2012 is currently 75 per cent.
“We remain a business that is investing heavily in new routes, in new aircraft and in new infrastructure,” said Hogan. “In 2012, we will add seven aircraft and have already announced plans to extend our network in Asia and Africa.”
“In January, we commenced operations to Tripoli, and Shanghai and Nairobi will follow – all in the first quarter. In July, we will add an additional African destination – Lagos – and will continue to announce new destinations in the coming months.”
Etihad Airways has also announced the launch of a daily non-stop flight to Washington, DC, the airline’s fourth destination in North America, from March 31 2013.