Dubai: Abu Dhabi based Etihad Airways managed to bring down its losses, recording $870 million for 2019 compares with $1.28 billion in 2018.
This was brought on by a reduction in operating costs, which were cut “significantly” during 2019, the airline said.
Still, the airline does not expect to turn a profit until 2023, based on what the management said in November last.
Passenger movements for 2019 fell to 17.5 million in 2019 from 17.8 million. Passenger revenues also slipped to Dh17.6 billion.
Etihad had a total aircraft fleet of 101 jets (95 passenger aircraft and six cargo freighters). This is in comparison to 106 aircraft at the end of 2018. Last month, Etihad said it would sell 38 aircraft — 22 Airbus A330s and 16 Boeing 777-300ERs — in the deal with investment firm KKR andAltavair AirFinance. The deal was valued at $1 billion.
A sense of 'vigour'
“There’s still some way to go but progress made in 2019, and cumulatively since 2017, has instilled in us a renewed vigour and determination to push ahead and implement the changes needed to continue this positive trajectory,” said Tony Douglas, CEO of Etihad Aviation Group.
“Operating costs were reduced significantly, and both yields and load factors were increased despite passenger revenues being down due to network optimization.”
Douglas said that the drop in costs will offset “pressures faced by the business,” and give Etihad headroom to invest in technology and sustainability initiatives.
The carrier has been implementing a turnaround strategy since 2017 after it accrued billions in losses from failed investments in international airlines. The turnaround strategy started with appointing a new CEO in Douglas, who focused on cutting costs through axeing routes that weren’t lucrative enough, selling off some aircraft, and cutting jobs.
Still, the Abu Dhabi airline does not expect to turn a profit until 2023, its management said in November 2019.
Busy schedule ahead
In October last, Etihad and Sharjah's Air Arabia had announced a joint venture - Air Arabia Abu Dhabi - that will cater to demand for low-cost travel options in the region. Air Arabia Abu Dhabi will begin operations in the second quarter, and will "operate independently, complementing Etihad’s network of routes from the Abu Dhabi hub".