By Claire Valdini
Carrier boosts passenger numbers by 500,000, while CEO says on track to become US$5bn firm
Abu Dhabi-based Etihad Airways saw first quarter revenues increase 28 percent year-on-year to US$989m on the back of increased passengers, its CEO said Monday.
The airline said it was on track to achieve a second year of profitability, James Hogan told reporters Tuesday.
“[It’s] a good start to the year. There are always challenges but certainly I am bullish about the way forward and very focused that we’ll achieve profitability again this year,” he said.
“We’re certainly looking at being a US$5bn business this year, last year was just over US$4bn,” he added.
The carrier said it would launch new routes to Vietnam and South America next year but declined to name which cities.
“Next year we’ll start Vietnam and South America so all six continents of the world will be linked by Etihad. I’m not saying which city in South America because we are in final negotiations,” said Hogan.
Etihad said average seat factor was 76.5 percent for the first three months of the year while passengers increased 500,000 to 2.4 million. Air cargo operations increased 12.2 percent to US$159m.
The carrier said it remained committed to its hedging program to help guard against soaring fuel costs.
“Fuel prices are our largest variable cost and they were tracking higher than 2011. We remain committed to an active fuel hedging strategy. 80 percent of our first quarter's fuel costs were hedged and we currently have 74 percent of fuel costs hedged for the rest of 2012,” Hogan said.
The airline, which owns stakes in Germany's Air Berlin and Air Seychelles, posted its first ever profit in February. Full year net income reached US$14m for 2011, based on a 36 percent increase in revenues to US$4.1bn.
The airline recently announced a number of new routes for 2012, including one to war-torn Libyan capital Tripoli and one to Kenyan hub Nairobi.
Etihad this year also inked major new codeshare agreements with China as it embarks on a major new expansion in that country. It’s MoU with China Eastern Airlines and Hainan Airlines extend Etihad’s influence in China, where the carrier currently flies to Beijing, Shanghai and Chengdu.