Core operations improve in terms of returns but carrier posts more than a billion and a half in losses
Abu Dhabi-based Etihad Airways has announced annual results from last year which show higher revenues and shrinking losses, albeit losses from core operations of more than a billion and a half dollars show the airline is still having to cope with the effects of a strategy that saw it absorb impacts from partners Alitalia and Airberlin which went into administration.
Revenues have increased 1.9 percent to $6.1 billion from $5.9 billion in 2016, while losses in core operations have shrunk by $432 million to $1.52 billion from a record $1.95 billion last year. The airline carried 18.6 million passengers last year, and despite $337 million in additional costs from higher fuel prices, the airline says unit cost efficiencies have improved by 7.3 percent; general and administration expenses have been reduced by $162 million over the last year.
“Results published for 2017 are for core airline operations and exclude any extraordinary or one-off items,” Etihad said in a statement.
Etihad’s equity partnership strategy pursued under former CEO James Hogan has seen in it having to absorb a significant amount of losses over the last two years as its equity partners Alitalia and Airberlin entered administration last year.
Air Berlin, which Etihad has a 29 percent stake, posted a record loss of €781.9 million loss ($824 million) last year. Eithad also had a 49 percent stake in Alitalia, the other major European carrier to declare bankruptcy last year; in April last year, the Italian carrier said it was losing half a million euros ($533,000) a day.
Etihad has since undergone a comprehensive business transformation programme which has seen new appointments across its leadership team including the appointment of new Group CEO Tony Douglas. Appointed in September last year, Douglas was previously CEO of Abu Dhabi Airports Company, before he left to join the UK Ministry of Defence in 2016.
“This was a pivotal year in Etihad’s transformation journey,” according to Mohamed Mubarak Fadhel Al Mazrouei, Chairman of the Board of Etihad Aviation Group. “The board, new executive leadership team and all our employees worked extremely hard to navigate the challenges we faced. We made significant progress in driving improved performance and we are on track in 2018.”
Etihad is making “good progress in improving the quality of revenues, streamlining costs, improving cash-flow and strengthening its balance sheet,” Douglas said in a statement included with the earnings announcement.
“These are solid first steps in an ongoing journey to transform this business into one that is positioned for financially sustainable growth over the long term,” he added. “It is crucial that we maintain this momentum, retaining talent and attracting leading professionals from around the world to work alongside our highly-skilled UAE national workforce.”For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.