Etihad set for breakeven in 2011, profit in 2012

Dubai : Etihad Airways will report profitable earnings before interest, taxation, depreciation, amortisation and rentals (Ebitdar) for this year, followed by full break-even in 2011 and profitability in 2012, Chief Executive James Hogan said in London on Wednesday.

Speaking at a financial roadshow event attended by more than 170 representatives of banks and other financial institutions, Hogan laid out Etihad's business strategy for the future, as well as its commercial performance since it was established seven years ago.

Despite heavy investment in new routes, fleet and infrastructure, the airline will reach full break-even by 2011, leading to full profitability in 2012, he said, according to a media release sent to Gulf News yesterday.

Ebitdar is a standard measure of operational profitability in the airline industry.

The 2010 result will be the first time the airline has reported profitable Ebitdar.

On track

"With only a month to go, we are well on track for profitable Ebitdar for 2010, marking an important milestone in the commercial development of the airline," Hogan said.

"Our next goal is full break-even in 2011, leading to sustainable profitability from 2012 onwards. All our indicators show that these targets are in our sights.

"The growth of Abu Dhabi as a global destination is playing a critical role in our development. The government's investment in tourism infrastructure, in hotels and attractions, and in the business environment is really paying dividends," he said.

Etihad's financial road- shows are part of the airline's commercial fund-raising programme, largely in support of its aircraft financing.

The majority of the fin-ancing for the airline's fleet is raised on commercial markets and Etihad regularly updates the financial community on the performance of the business.

Hogan said: "There has been recent interest in the issue of export credit guarantees, but for Etihad, this has always been only a small element of our aircraft financing strategy.

"The large majority of our financing comes from commercial agreements and it is important for international institutions to understand the performance of the business."