Dubai: Etihad Airways reported on Thursday its fourth straight year of profit as its investments in other airlines helped mitigate the effects of fluctuating currencies and conflict in several areas it operates.
The Abu Dhabi carrier is one of the fastest-expanding airlines worldwide with strategic equity partnerships with eight airlines. The airline’s total revenue stood at $73 million last year, up 17.7 per cent compared to the $62 million it reported for the previous year.
“We continue to focus on cost control across all areas of the business, with particular benefits being delivered from business efficiencies identified with our partner airlines. Coupled with the growing advantages of our economies of scale, this is allowing us to deliver stronger profitability,” an Etihad spokesperson told Gulf News by email.
Sales increased by 24.5 percent to $7.6 billion, which includes $1.1 billion in revenue from codeshare and equity investment airlines.
Despite the price of oil collapsing last year, Etihad’s “total fuel costs for the year were slightly higher than planned” meanwhile the stronger US dollar had a “negative impact overall”, the spokesperson said. Etihad did not state its operating costs for 2014. However, “total operating costs increased in line with increases in our operations”, the spokesperson stated.
Etihad’s high-spending expansion strategy, which saw it complete equity investments to take 49 per cent stakes in Air Serbia and Italy’s Alitalia in last year, has gathered plenty of attention.
Etihad Airways President and Chief Executive, James Hogan, warned on Thursday that the airline is “faced with unprecedented external challenges”.
“Of particular concern has been the rise in aggressive protectionist sentiment in Europe and the US … They threaten to damage the significant progress that our airline has made,” he stated.
Etihad is caught up in an increasingly heated spat with European and American competitors who allege that the airline, along with Emirates and Qatar Airways, are able to pinch passengers because they are propped up by government subsidies.
Etihad’s decision to only release results of the airline business and not the Etihad Aviation Group that was formed last year and includes travel divisions could raise eyebrows among some of its unhappy competitors, analysts say.
“Some will continue to be irked by the lack of transparency around the Group’s total position when considering investments and other parts of the business,” said Will Horton, senior analyst at CAPA – Centre for Aviation, by email.
Similarly, John Strickland, Director of UK-based JLS Consulting, said by email, “US carriers are likely to argue that the figures do not provide sufficient detail on the airline’s commercial performance.”
In 2014, Etihad committed to spending €1.75 billion investment in Alitalia including €387.5 million to take a 49 per cent as part of a deal sealed last year. Etihad also spent €300 million in purchasing convertible bonds in Air Berlin, an airline it holds nearly 30 per cent of, as part of a capital injection. It reportedly spent almost €10 million lifting its stake in Ireland’s Aer Lingus and spent 26.3 million Australian dollars in one of two equity stake increases in Virgin Australia in 2014.
