By Sarah Townsend
President and CEO James Hogan says group is rationalising operations and ‘working smarter’ following leadership shake-up
Etihad Aviation Group has imposed a freeze on hiring new non-operational staff until the end of the year, its president and CEO James Hogan has said.
The freeze was introduced in the first quarter of 2016 as a response to squeezed profit margins on airfares across the whole of the aviation industry.
Hogan told reporters ahead of the International Air Transport Association (IATA) annual conference in Dublin this week that some of the group’s 27,000 staff would not be replaced if they resigned.
However, he insisted that there would be no redundancies and the freeze would only affect non-operational (back-office) employees – the airline would continue hiring cabin crew, pilots and engineers.
He said: “The [employment freeze] will stay in place at least until the end of the year. We are rationalising.
“Look, we used to have [back-office functions such as] HR and finance and IT in every one of our regional offices. Now, we are working smarter and refocusing our operations.”
Huge pressure on yields
He said that while air passenger demand has held up over the past year – especially in Asia – there remains “a huge pressure on yields”.
“We will hit our [financial] targets this year, but the costs to Etihad of offsetting that pressure will be considerable,” he said, declining to put a figure on anticipated growth for 2016.
Etihad last month announced net profit of $103 million for 2015, helped by its equity stakes in partner airlines around the world.
Profits rose from $73 million in 2914, although that figure represented Etihad's standalone airline business, while the 2015 results referred to the group consolidated financial figures.
Revenues rose by 22 percent to $9.02 billion, compared to $7.55 billion in 2014, on the same basis.
Also last month, Etihad confirmed that Jet Airways, the Indian airline in which it holds a 24 percent stake, has return to profit, reporting $185 million of profits in its 2016 financial year, compared to losses of $345 million the year before.
Citing figures in an Etihad-commissioned report published by Oxford Economics this week, Hogan said the group is expected to carry 19 million passengers this year, an increase on the 17.6 million in carried in 2015.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.