Etihad poised to cut its fuel bill by $20mn

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FUEL EFFICIENCY: Etihad says it will cut its fule bill by $20 million by the end of 2008. (Getty Images)

Etihad Airways said on Monday that it was on course to slash its fuel bill by $20 million by year-end as part of a company review into possible cost-cutting measures.

A comprehensive review of all aspects of its flight operations which aimed to identify areas for saving money was launched by the airline earlier this year.

The work, supported by the International Air Transport Association (IATA), highlighted 23 fuel-efficiency measures, many of which have now been fully or partially introduced by the Abu Dhabi-based carrier.

Etihad has saved more than $12 million so far this year remains on track to achieve it $20 million target by the end of 2008.

But a spokesman said the savings would not see an immediate reduction in the fuel surcharge paid by passengers. "We are constantly monitoring the situation but at this stage there is no plan to lower our fuel surcharge," Leo Seaton, head of media relations at Etihad told Arabian Business.

The move comes at a time when major Middle East airlines are predicted to see revenues drop and may be forced to cut back their large aircraft orders.

The International Air Transport Association figures for September showed passenger traffic for Middle East airlines dropped for the first time in years, falling 2.8 percent on the same period last year.

Regional airlines recorded traffic growth of 10.6 percent in the first six months of this year, but that slipped to 5.3 percent in July and 4.3 percent in August, the official figures showed.

Captain Richard Hill, Etihad Airways’ executive vice president operations, said: “With the high price of aviation fuel and against a deteriorating global economic backdrop, it is increasingly important that Etihad does all it can to control its cost base.

“Fuel is now Etihad’s largest single cost and accounts for between 35 and 40 per cent of the airline’s annual expenditure. This is an area where we are heavily focused to try and generate significant and sustained savings.”

Fuel savings have been achieved through a variety of measures that include reducing weight on board the aircraft, changing certain operating procedures, reducing cruise speed where appropriate and increasing the frequency of engine washes.

The airline placed one of the largest aircraft orders in commercial aviation history in July at the Farnborough International Airshow in the UK.

A key selection criterion in the deal, which includes 100 firm orders for a combination of ‘next generation’ Airbus and Boeing aircraft, was the environmental performance of the aircraft.

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