Etihad break-even one year later than expected

Dubai: Etihad Airlines, the UAE's national carrier, expects over $3 billion (Dh11 billion) revenues this year, but will reach profitability in 2011, a year later than originally expected, chief executive James Hogan said yesterday at the Dubai Air Show.

The airline announced Dh2.7 billion ($750 million) worth of investments, which include a component support deal worth up to $250 million with MRO supplier SR Technics. The deal will provide the airline with access to over 3,000 parts at the Abu Dhabi and other global outstations.

A $220-million contract was also revealed for overhaul and repair services with International Aero Engines. The service will be for 14 of the airline's narrow-bodied Airbus fleet.

Other investments include a cabin upgrade contract with Abu Dhabi Aircraft Technologies for the airline's Boeing 777 and Airbus A320 fleet; a renovation of its first class suite in nine Airbus A340 deal with Lufthansa Technik and an in-flight entertainment system installation deal with Panasonic on new A330-300 fleet and the new Boeing B777 aircraft scheduled for delivery from December 2009 and 2011, respectively.

The airline will also sign an agreement with Lufthansa Systems for a new flight planning system to reduce costs by up to 5 per cent and a workforce management agreement with Kronos Incorporates to automate the planning and management processes for the airline's 4,000 cabin and flight crew.

With the deals, the airline will be able to cut its cost and bring efficiency to its operations. "We will take a commercial view of our investment strategy, so we can be sure of delivering a satisfactory return to our shareholder," Hogan said.

Next decade

The airline is awaiting the delivery of about 100 aircraft from Boeing and Airbus over the next decade.

Next year, it will receive two A330s, while 2011 will see a Boeing 777, an A320 and more A330s. By the end of 2012, the airline plans to have a fleet of 65. The airline will also be taking delivery of the much-awaited and delayed Dreamliner 787 by the end of 2013.

"We have to do financing for the next eight aircraft, already done two. We're confident that we can continue to finance the aircraft as we move forward," Hogan said.

He said that no new orders would be placed anytime soon after last year's order of $43 billion, which included an option and purchase rights for 105.