x Abu Dhabi, UAEFriday 28 July 2017

Etihad profits triple to Dh154.2m as Abu Dhabi airline soars

Revenue, passenger numbers and cost control also improved during a year in which Etihad took equity stakes in several other international airlines.

Etihad has notched up a second year of profits, it annouced today. Andrew Parsons / The National
Etihad has notched up a second year of profits, it annouced today. Andrew Parsons / The National

Etihad Airways tripled its profits to US$42 million (Dh154.2m) last year as a bigger global presence drew more passengers to its network.

Revenue, passenger numbers and cost controls all improved during a year in which the airline took equity stakes in several international peers.

"This has been a game-changing year for Etihad Airways," said James Hogan, the president and chief executive. "We have delivered improved net profit, the second consecutive year we have been in the black, a remarkable achievement given the youth, ambitious growth and ongoing investment made by this airline in a challenging global economic environment."

The results build upon a successful 2011 for the airline, when it nudged into the black for the first time. Etihad reported a net profit of $14m for that year.

Last year, revenue rose 17 per cent to $4.8 billionas passenger numbers grew by 23 per cent to 10.3 million.

Returns from acquisitions and codeshares delivered more than $600m in total revenue.

"We have taken great strides in building the industry's first 'equity alliance', with our investments in Air Berlin, Air Seychelles, Virgin Australia and Aer Lingus, which are contributing significant value to our business," said Mr Hogan.

Last year marked the first full year of its strategic partnership with Air Berlin, in which Etihad took an equity stake of 29.1 per cent in December 2011. It also bought a 40 per cent stake in Air Seychelles in January last year and was given a five-year management contract to run the airline. It also took minority stakes in Virgin Australia and Aer Lingus.

The airline could add to its investments in the coming weeks as it considers taking a stake in Jet Airways. "Last week we were in India and we were in discussions with Jet Airways and in the next few weeks will present that to our board and a decision will be taken," said Mr Hogan.

Saj Ahmad, the chief analyst at StrategicAero Research, an aviation consultancy, said he had expected a doubling of Etihad's profits.

He said that the airline's policy of combining growth via its partners with that of its own operations was "paying some pretty sweet dividends", adding that Etihad's "approach of 'slowly but surely' is one that mitigates risk going forward".

The airline now aims to sustain profitability for a third year, in which it will also mark its 10th year of operation in November.

"We have exceeded the results set by our board for 2011 and last year and we intend to achieve profitability again this year," said Mr Hogan.

After expanding its fleet to 70 aircraft last year with the addition of six new planes, Etihad will take delivery of 14 more this year, he said. These will include the first of 41 Boeing 787 Dreamliners.

The 787 has been beset by safety problems, but Mr Hogan backed Boeing to resolve the issues.

"We are taking 41 787s, Air Berlin is taking 15," he said. "We take our first at the end of next year and are 100 per cent behind Boeing and think it will be a great aircraft and are confident Boeing will fix the issues."

Etihad intends to add 2,000 staff to its workforce of 10,820 this year.

tarnold@thenational.ae