The UAE national carrier's chief executive is positive revenues will rise despite the possibility of missing its break even target.
Etihad forecasts revenue growth of 24%
Etihad Airways expects revenues to increase 24 per cent this year to US$3.1 billion (Dh11.38bn) as it builds its network despite the economic downturn, the company said yesterday. The airline's strategy is to press ahead with capacity growth, despite industry-wide pressure on margins, and to pick up business from other carriers that are cutting back to stay afloat. "2009 will be a tough year, but we are continuing to grow and move forward," said James Hogan, the chief executive of Etihad. The five-year-old airline is scheduled to launch six new routes this year and will also bolster existing services in growing markets as it strives to break even, despite a market that the International Air Transport Association called "the worst revenue environment in 50 years". Middle East airlines are forecast to lose $200 million this year as capacity is added faster than ticket sales. Etihad will receive 11 new narrow and wide-bodied aircraft this year, allowing it to launch services to Melbourne, Athens, Istanbul, Larnaca, Chicago and Hyderabad. It has also committed to add frequencies to existing destinations in Beirut, Cairo, Amman, Moscow, Milan, Brussels and Manila. Etihad would also begin its first flights to South America within five years, Mr Hogan said. The plans are part of Etihad's strategic role in developing Abu Dhabi as a world-class city and helping to increase tourist arrivals from 1.8 million last year to 7.9 million in 2030. By that time, the carrier expects to have increased its staff from the current 7,000 to 27,000, and to be operating a fleet of 152 aircraft to 100 destinations. Etihad's bullish moves this year contrast with other airlines, which are cutting routes to limit losses. Singapore Airlines is scaling back its capacity by 11 per cent, while airlines worldwide have grounded 300 jets, according to Bloomberg. "This is the time to be picking up the gaps that other airlines are making," said Peter Harbison, the executive director of the Centre for Asia Pacific Aviation. "It's a perfect time for Etihad because they are able to do it." In a rare disclosure of the airline's financial performance, Mr Hogan said Etihad took in $2.5bn in revenues last year. He spoke during the Aviation Outlook Middle East aviation conference in Abu Dhabi yesterday. The carrier expects its seat load factor, or percentage of seats filled, to reach 77 per cent this year while its yield, or average revenue per seat, will rise by 8 per cent. But next year will be more pivotal for Etihad as it seeks to reach a break-even point. Mr Harbison said the airline could miss its break-even target in the current scenario, with businesses slashing budgets and travellers cutting back on discretionary flights. email@example.com