UAE's Etihad Airways welcomes first Fitch 'A' rating

Airline chief James Hogan says rating takes Etihad's financial transparency to a new level
UAE's Etihad Airways welcomes first Fitch 'A' rating
By Staff writer
Wed 03 Jun 2015 03:57 PM

Etihad Airways on Wednesday welcomed the announcement that it has been assigned the rating of 'A' with a stable outlook by Fitch Ratings.

Fitch Ratings, one of the world's largest credit ratings agencies, issued the long-term issuer default rating (IDR) following an independent analysis of Etihad's business, its commercial performance and its equity alliance strategy.

James Hogan, president and CEO of Etihad Airways, said: "The Fitch A rating is further independent recognition of the strength of this business and of our strategy.

"We have a clear mandate from our shareholder to deliver long-term, sustainable profitability. Our organic growth, boosted by our minority equity investment model, is increasingly being recognised as a highly effective strategy to deliver that return.

"We have already raised more than $11 billion to support our growth, from more than 80 financial institutions around the world. We raise that finance on commercial terms, with no sovereign guarantees or letters of comfort.

"We have always operated with a high level of transparency to the financial community. Our first credit rating now takes that transparency a step further.

"This rating, which is based upon detailed analysis of our business performance and our strategy, will help international investors understand our story as we continue to expand our operations and raise additional external financing."

While recognising that Etihad operates in an environment of "fierce competition", the ratings agency said in its report that the airline "has three competitive advantages over its Gulf peers - US pre-clearance at its Abu Dhabi hub, shorter connecting time and greater domestic access to key markets such as Europe and India, through its airline partnerships".

The Fitch report added: "We believe that the achieved critical network size should enable the company to focus on profitability management capitalising on its scale and brand recognition, as well as on incremental revenue and synergies from its operations with equity partners.

"While the company plans to continue heavy investments in fleet expansion, we believe it has reached a more mature stage of its business profile development, which should enable it to focus more on profitable growth."

Etihad Airways recently reported revenues of $7.6 billion and net profits of $73 million for 2014, marking its fourth consecutive year of profitability.

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