Stock - Etihad Airways
Etihad is going through a major restructuring exercise to fit in with the new post-pandemic realities. Image Credit: Supplied

Dubai: Abu Dhabi’s Etihad Airways posted passenger revenues of $1.2 billion (Dh4.41 billion) in 2020 - down 74 per cent from a year earlier, as air travel demand took a direct hit from COVID-19 for the better part of the year.

The carrier recorded a 76 per cent fall in passengers carried throughout the year as a result of “lower demand and reduced flight capacity caused by the unparalleled global downturn in commercial aviation,” said Etihad.

This resulted in the airline recording a core operating loss of $1.70 billion (Dh6.24 billion) in 2020, with the EBITDA (earnings before interest, taxes, depreciation, and amortization) turning into a loss of $650 million (Dh2.39 billion).

Total passenger capacity was reduced by 64 per cent in 2020 to 37.5 billion available seat kilometres (ASKs), down from 104 billion in 2019, with the seat load factor declining to 52.9 per cent. Total passenger capacity was reduced by 64 per cent in 2020 to 37.5 billion available seat kilometres (ASKs), down from 104 billion in 2019, with the seat load factor declining to 52.9 per cent.

The airline targets a complete turnaround by 2023, "having accelerated its transformation plans and restructured the organisation during the pandemic into a leaner and more agile business".

“While nobody could have predicted how 2020 would unfold, our focus on optimising core business fundamentals over the past three years puts Etihad in good stead to respond decisively,” said Tony Dougles, Etihad CEO, in a statement.

Tony Douglas, Etihad CEO
Tony Douglas, Etihad CEO: "As the world’s first airline to vaccinate all our operating pilots and cabin crew against Covid, we are ready to welcome back travellers to experience best-in-class travel with Etihad Airways..." Image Credit: Supplied

Cargo impresses

The airline’s cargo operation recorded a 66 per cent increase in revenue to $1.2 billion (Dh4.41 billion) last year. This was driven by “huge” demand for medical supplies, such as personal protective equipment (PPE) and pharmaceuticals, paired with limited global airfreight capacity. Cargo yield saw an improvement of 77 per cent.

Costs dip

The airline's Operating costs decreased by 39 per cent year-on-year to $3.3 billion (Dh12.12 billion) in 2020 due to lower capacity and cost-cutting initiatives. During the same period, overheads were reduced by 25 per cent to $800 million (Dh2.94 billion), while the finance cost reduced by 23 per cent through an ongoing restructuring process.

Before the pandemic
Prior to the pandemic, Etihad was ahead of its transformation targets set in 2017, registering a 55% cumulative improvement in core results by end 2019.

This continued into the start of 2020, with a "record first quarter that showed year-on-year improvement of 34%," the airline said in a statement.