Etihad Airways has made its first ever profit – reporting a full year EBIT of US$137 million, on revenues up 36.0 per cent to US$4.1 billion (2010: US$2.98 billion).
The results included earnings before interest, tax, depreciation, amortisation and rentals (EBITDAR) of US$648 million, with a net profit of US$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 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.
“The mandate from our shareholder was to create an airline that is best in class, operates to the highest safety standards, and makes money – and we have achieved this mandate.
“Everything we said we’d 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,” Mr Hogan said.
Hogan said 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 US$50 million.
“And of course, 2011 marked the first full year of Etihad’s 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.”
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 US$187 million.
“While we deliver an exceptional full service product, our management culture is that of a low cost airline. We have a forensic focus on cost control in every area of the business, aggressively targeting operational efficiencies.”
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.
At the end of 2011, the company had 9,038 employees, up 15.1 per cent on 2010 (7,855), with more than 120 nationalities represented. Etihad Airways’ successful Emiratisation scheme continued, with Emiratis now making up 18 per cent of the headquarters workforce.
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