Etihad Airways Reports Full Year EBIT of US$137 million

Etihad Airways has reported a full year EBIT of US$137 million, on revenues up 36% to US$4.1 billion (2010: US$2.98 billion).

The results included earnings before interest, tax, depreciation, amortisation and rentals (EBITDAR) of US$648 million, with a net profit of US$ 14 million. The record result exceeded the airline’s 2011 target, which was to break even.

James Hogan, President and Chief Executive Officer of Etihad Airways, said, “This is an historic day for Etihad Airways and an amazing achievement for an airline just eight years old. Five years ago we said we would be profitable by 2011. Despite the global financial crisis, continued high oil prices, regional instability and natural disasters, we have delivered. The mandate from our shareholder was to create an airline that is best in class, operates to the highest safety standards, and makes money – and we have achieved this mandate.”

“Everything we said we would do, we have done. Now, we move into the next phase of our development whereby we deliver consistent, sustainable profitability. And we will aim for strong growth again in 2012, in spite of the tough global economic environment, with a passenger traffic target of 10 million and a corresponding increase in profits,” Mr Hogan added.

Highlights of the 2011 result included:

• 8.3 million passengers, up 17% on 2010 (7.1 million);
• an average seat factor of 75.8%, nearly two percentage points higher than 2010 (74.0%);
• growth of available seat kilometres from 45.2 billion (2010) to 51.0 billion, up 13.0%;
• the addition of five new routes – Bangalore, the Maldives, the Seychelles, Chengdu and Düsseldorf;
• Etihad Crystal Cargo revenues up 25.7% to US$651 million (US$518 million) on tonnage up 17.8% to 310,188 tonnes (263,313 tonnes);
• an increase in total aircraft departures, from 57,534 to 62,735, with a technical dispatch reliability of 99%; and
• eight new codeshare agreements, taking Etihad Airways’ codeshare partners to 35 airlines, which increased its worldwide network to 259 destinations – more than any other Middle East air carrier.

Mr Hogan said Etihad Airways’ successful partnership strategy intensified, with its first equity investment in another carrier – airberlin, Europe’s sixth largest airline, which was announced in December 2011.

“This was a game changing move for Etihad Airways, adding 157 destinations and giving us access to 35 million new passengers. The airberlin deal will be our most important catalyst for growth in 2012. It has given us instant access to Europe’s largest travel market, and will have a major impact on revenues in 2012, with an expected contribution of up to US$50 million.

“And of course, 2011 marked the first full year of Etihad Airways’ strategic partnership with Virgin Australia, which offers 45 destinations in Australia and the Pacific, and boosted revenue by 700% over what we achieved with our previous Australian airline partner.

“We will continue to look at opportunities in 2012. Already this year, we have announced a second equity investment, in Air Seychelles, which is an important step towards growing our operations in the increasingly popular leisure markets of the Indian Ocean and Africa.”

Mr Hogan said cost control had been a significant contributor to the airline’s profit, with costs per available seat kilometre (CASK) excluding fuel being cut by 4.6% in 2011 and 16.6% over the last two years, representing annual savings of more than US$187 million.

“While we deliver an exceptional full service product, our management culture is that of a low cost airline. We have a forensic focus on cost control in every area of the business, aggressively targeting operational efficiencies.”

The airline also continued its policy of fuel hedging, which has protected the airline from the volatility of oil prices. More than 80% of fuel costs were hedged in 2011 while the figure for 2012 is currently 75%.

At the end of 2011, the company had 9,038 employees, up 15.1% on 2010 (7,855), with more than 120 nationalities represented. Etihad Airways’ successful Emiratisation scheme continued, with Emiratis now making up 18% of the headquarters workforce.

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