Etihad Airways expects demand to surge as losses halved in the first half of the year

Dubai, United Arab Emirates-Abu Dhabi’s Etihad Airways narrowed its operating loss to US$400 million and cut costs by nearly 30% in the first half of the year, predicting a “wave of demand”.

Etihad Airways stated that this result reflects the “gradual recovery” of the entire business. Prior to this, the airline lost US$800 million in the same period last year because the pandemic hit the global aviation industry and the global economy fell into lockdown.

“Etihad Airways is making up for lost ground every day,” Group Chief Executive Tony Douglas (Tony Douglas) said in a statement on Tuesday.

He added: “Although the curveball of the Delta variant disrupted the recovery of global air travel, we continue to increase our operations and the situation today is much better than this time in 2020.”

Etihad Airways, which is wholly-owned by the Abu Dhabi government, said passenger revenue dropped from US$1 billion to about US$333 million, a 68% year-on-year decrease. The airline blamed “new variants of the coronavirus affecting the major tourist markets in the Indian subcontinent and Europe.”

The decline in passenger revenue was offset by its freight business, which grew 56% year-on-year to US$800 million.

Adam Boukadida, chief financial officer of Etihad Airways, said: “Although the recovery of market demand is slower than expected, our record cargo performance continues to drive business development.” “Despite the pandemic. It still brings challenges, but Etihad Airways is on its way to becoming a sustainable and profitable company.”

Airlines in the capital of the United Arab Emirates have been at a loss for many years. Etihad lost a total of US$5.62 billion between 2016 and 2020 as it aggressively acquired shares in European and Asian airlines in an attempt to compete with rivals Qatar Airways and Dubai’s flagship airline Emirates.

Its 2020 full-year loss was US$1.7 billion, due to the general decline in airline revenues, the company was forced to ground its flights, and the pandemic brought travel to a halt.

The last time Etihad recorded a profit was in 2015, when it announced a net profit of $103 million.However this number is Controversial in the report The Open and Fair Sky Partnership and several US-based airlines complained that because Etihad received a large amount of government subsidies, there was unfair competition.

Etihad Airways stated that, supported by the reduction in transportation capacity and volume-related costs, operating costs in the first half of 2021 fell by 27% year-on-year, from US$1.9 billion to US$1.4 billion. The airline said that cutting fixed administrative expenses and financing costs would also help restore its liquidity situation to pre-pandemic levels.

“Once the destination is added to the Abu Dhabi Green List or the UAE Tourism Corridor, we will see that in some cases bookings will increase three to six times, which indicates that the demand wave is waiting to be released,” Douglas said.

The airline carried 1 million passengers in the first half of this year, down from 3.5 million in the first half of 2020. Etihad Airways stated that as of the end of June, it operated nearly 3,500 flights per month to 67 passenger and cargo destinations.

According to the International Air Transport Association (IATA), this result was announced after the “worst year in history” for global air transport.

Willie Walsh, Director General of the International Air Transport Association, said in a statement last week: “At the height of the crisis in April 2020, due to the government’s closure of borders or strict quarantine, 66% of the global commercial air transport fleet was suspended. fly.”

The latest statistics from the International Air Transport Association show that the industry has lost 1 million jobs and the total industry losses are $126 billion.