Etihad Airways revenue lifted by 28 per cent in the first half of the year, driven by the airline’s strategy of adding capacity through alliances.
Revenue reached US$3.2 billion during the first half. Etihad’s equity partners contributed about 15 per cent of the amount, or $471 million. Passenger numbers grew 22 per cent to 6.7 million. Etihad did not say if it had made a profit.
"At a time when the global airline industry has struggled with high fuel prices, intense competition and a slowdown in the cargo market, Etihad Airways has achieved record success, carrying more passengers and cargo to more destinations around the world," said James Hogan, the president and chief executive of Etihad. "We have ambitious plans to build on this momentum in the second half of 2014."
Etihad’s growth strategy has relied heavily on expanding its route network through equity alliances, in which it invests in carriers that help it to expand its reach in strategically important regions. Last year, Etihad grew its equity alliances to seven, comprising Air Seychelles, airberlin, Virgin Australia, Air Serbia, Ireland’s Aer Lingus, India’s Jet Airways and Etihad Regional – a Swiss airline formerly known as Darwin Airline.
The latest addition to this growing family of equity alliances could be Alitalia, the loss-making Italian flagship carrier. Etihad is in the final stages of finalising documents and getting regulatory and shareholders’ approval to acquire 49 per cent of the airline.
“Partnership revenue is now 23 per cent of total passenger revenue [for Etihad], up from the 20 per cent figure of the first half of 2013,” said Will Horton, a senior analyst Sydney-based Centre for Aviation (Capa). “This figure should climb significantly as Etihad settles into its Jet Airways acquisition and finalises arrangements with Alitalia.”
Other analysts say that some of Etihad’s investments would be more “challenging” to turn around to profitability.
“While Etihad’s … turnaround efforts at Air Seychelles are bearing fruit, the task facing it in replicating this on airberlin, Virgin Australia and, in particular, Alitalia remains challenging,” said Daniel Tsang, the founder and chief analyst at the Hong Kong-based aviation consultancy Aspire Aviation.
Air Seychelles almost tripled its profit last year, reporting $3 million net profit from $1.1m in 2012. But airberlin, which is 29 per cent owned by Etihad, is still struggling. Last year it lost €231.9m (Dh1.15bn), after a profit of €90m in 2012. Etihad provided €300m to the carrier in April.
Alitalia, which received a €500m government rescue package last year, is losing €1.5m a day and is €1bn in debt.
Etihad says that its network will reach 103 destinations by the end of the year, with flights to the Armenian capital of Yerevan launched on Sunday and to Rome next week. Services to Perth, Phuket and Dallas are expected before the end of the year. The airline also expects to add six jets to its fleet in the second half, including its first Airbus A380 and Boeing 787.
selgazzar@thenational.ae
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