Etihad Airways Chief Financial Officer Adam Boukadida. Image Credit: Etihad

Dubai: After delivering a stellar performance in the first half of 2022, Etihad Airways is well on track to double the numbers in the second half.

The Abu Dhabi-based airline carried 4.02 million passengers in the first half of this year, and is comfortably placed to clock 8 million when the year ends, Chief Financial Officer Adam Boukadida told Gulf News in an interview.

The carrier posted a record-breaking core operating profit of $296 million in the first half of 2022, compared to a $392 million loss in the year-ago period.

A year-end boost because of a packed events calendar – the UFC in October, the Abu Dhabi Grand Prix in November, and Fifa World Cup in Qatar during November-December – will help the airline continue to build on the momentum from the first half, the CFO said. “We expect a very busy last three months in 2022.”

Here are excerpts from an interview:

The airline saw the big jump in passenger numbers. What was the reason? More importantly, can it be sustained?

We know Abu Dhabi was very cautious during the COVID pandemic, and for the right reasons. This continued until last year. But since Q4 onwards, we have seen a dramatic increase in demand from passengers, and the outlook is equally bright.

The emirate’s tourism proposition plays a key role here, which has significantly enhanced over the last year or two. The service Etihad is now offering as a mode of transportation for Abu Dhabi as a destination is far greater than it was in the past.

Our load factors at the moment are in the mid 90 per cent. We recorded 97 per cent load factor across the entire network and fleet on Wednesday. For the full month of July, we are expecting it to be around 88 per cent. For Q3, we are looking at the late 80s, and we remain positive for Q4. We are well on track to double the four million passengers for the full year.

Cargo revenue was up even though carrying capacity reduced. What’s the outlook for the rest of the year?

For us, cargo continues to be a really strong, stable performer for the entire year. We saw an increase in flying passenger capacity by 46 per cent, which had a significant impact in the belly hold capacity of the aircraft. And despite that we have a seen a 6 per cent growth in revenue at $802 million in H1 compared to the year-ago period, which is remarkable. So the demand is definitely there. We don’t see any downward trend in the near term.

There’s no severe signs of any negative or downward change in the near-term.

Tell us about the airline’s debt reduction and lower costs

Debt has significantly gone down over a number of years now. Our four-and-a-half-year transformation is underway, and it focuses on every single touchpoint of the organisation. We have become more agile as a business. Our balance sheet has significantly improved. Our cost of financing is 13 per cent lower than this time last year, which indicates the successful reengineering and restructuring of the balance sheet.

If we look at the total cost base on a direct operating cost perspective, normalised for fuel, it is actually the same as last year, despite the 46 per cent increase in capacity that we have flown.

How is the A350 programme coming along?

The A350 is one of the most remarkable aircraft that we have in our portfolio. We are currently operating five, and we do plan to have several more over the coming years, which we will deploy on premium routes. They have a capacity of up to 40 premium business class seats. It’s one of the most sustainable aircraft, alongside the 787 Dreamliner. It’s a key part of our operation strategy and demonstrates what Etihad is – sustainable, young and first class service.

The most important thing is to ensure focus on sustainable growth, sustainable financial performance, and sustainability. Being the world’s top sustainable airline, I wouldn’t be surprised if we announce A350 flights to busy destinations such as London in the future. There’s definitely more to come.

What has been the impact of other UAE airlines operating out of Abu Dhabi on Etihad? Are you adding more destinations?

Etihad sees a blend of both transiting passengers and point-to-point traffic. The bulk is transiting passengers, and about 30 per cent is destination-to-destination. So there’s definitely room for more inbound traffic. We have the business capability set up and the general infrastructure. There’s a lot of space to grow as long as it’s profitable.

Reviews on new destinations is an ongoing process, almost on a weekly basis. There’s every possibility that we can add more destinations if it makes sense to do so. The airline has already launched five summer services, including new routes to Heraklion in Crete and the French city of Nice. We have also extended flights to Zanzibar until January 2023.

When did you realise that it was going to be a profitable first half? Group CEO Tony Douglas had given some indications in April.

I think it’s sensible to say that we should never count our chickens before they hatch. Having done the heavy lifting for four and a half years, we had a clear indication around March-April, but it would have been unwise to expect that no other risks or unexpected events would occur in the near future. If we go back two years ago, we were closing 2019 really strongly, but then we know what happened. Hopefully, we have seen the last of the pandemic now.

What has been the impact of the situation at London Heathrow?

We are continuing to monitor all global airport disruptions, not just Heathrow, and we continue to work with all the airports to ensure we provide the best end-to-end service for our passengers. Heathrow is a concern, but it has not had a major impact on our services for now.