Etihad Airways, the national carrier of the United Arab Emirates, today reported a full year EBIT of US$137 million, on revenues up 36.0 per cent to US$4.1 billion (2010: US$2.98 billion).
The results included earnings before interest, tax, depreciation, amortization and rentals (EBITDAR) of US$648 million, with a net profit of US$14 million. The record result exceeded the airline’s 2011 target, which was to break even.
James Hogan, President and Chief Executive Officer of Etihad Airways, said: “This is an historic day for Etihad Airways and an amazing achievement for an airline just eight years old.
“Five years ago we said we would be profitable by 2011. Despite the global financial crisis, continued high oil prices, regional instability and natural disasters, we have delivered.
“The mandate from our shareholder was to create an airline that is best in class, operates to the highest safety standards, and makes money – and we have achieved this mandate.
“Everything we said we would do, we have done. Now, we move into the next phase of our development whereby we deliver consistent, sustainable profitability.
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“Given the challenges faced by the industry, our combination of revenue growth and entry into profitability must be one of the best results of any airline in 2011.
“And we will aim for strong growth again in 2012, in spite of the tough global economic environment, with a passenger traffic target of 10 million and a corresponding increase in profits,” Mr Hogan said.
Highlights of the 2011 result included:
- 8.3 million passengers, up 17 per cent on 2010 (7.1 million);
- Average seat factor of 75.8 per cent, nearly two percentage points higher than 2010 (74.0 per cent);
- Growth of available seat kilometres from 45.2 billion (2010) to 51.0 billion, up 13.0 per cent;
- Addition of five new routes – Bangalore, the Maldives, the Seychelles, Chengdu and Düsseldorf;
- Etihad Crystal Cargo revenues up 25.7 per cent to US$651 million (US$518 million), tonnage up 17.8 per cent to 310,188 tonnes (263,313 tonnes);
- Increase in total aircraft departures, from 57,534 to 62,735, with a technical dispatch reliability of 99 per cent; and
- Eight new codeshare agreements, taking Etihad Airways’ codeshare partners to 35 airlines, which increased its worldwide network to 259 destinations – more than any other Middle East air carrier.
Mr Hogan said Etihad Airways’ successful partnership strategy intensified, with its first equity investment in another carrier – airberlin, Europe’s sixth largest airline, which was announced in December 2011.
“This was a game changing move for Etihad Airways, adding 157 destinations and giving us access to 35 million new passengers.
“The airberlin deal will be our most important catalyst for growth in 2012. It has given us instant access to Europe’s largest travel market, and will have a major impact on revenues in 2012, with an expected contribution of up to US$50 million.
“And of course, 2011 marked the first full year of Etihad Airways’ strategic partnership with Virgin Australia, which offers 45 destinations in Australia and the Pacific, and boosted revenue by 700 per cent over what we achieved with our previous Australian airline partner.
“We will continue to look at opportunities in 2012. Already this year we have announced a second equity investment, in Air Seychelles, which is an important step towards growing our operations in the increasingly popular leisure markets of the Indian Ocean and Africa.”
Mr Hogan said cost control had been a significant contributor to the airline’s profit, with costs per available seat kilometre (CASK), excluding fuel, being cut by 4.6 per cent in 2011 and 16.6 per cent over the last two years, representing annual savings of more than US$187 million.
“While we deliver an exceptional full service product, our management culture is that of a low cost airline. We have a forensic focus on cost control in every area of the business, aggressively targeting operational efficiencies.”
The airline also continued its policy of fuel hedging, which has protected the airline from the volatility of oil prices. More than 80 per cent of fuel costs were hedged in 2011, while the figure for 2012 is currently 75 per cent.
At the end of 2011, the company had 9,038 employees, up 15.1 per cent on 2010 (7,855), with more than 120 nationalities represented. Etihad Airways’ successful Emiratisation scheme continued, with Emiratis now making up 18 per cent of the headquarters workforce.
Mr Hogan thanked the staff for their extraordinary efforts. “This has been an incredible journey to profitability, achieved just eight years after Etihad Airways was launched, supported by the efforts of an outstanding team of 9,000 employees.
“Together, we have created the world’s leading airline, widely acclaimed for its best-in-class service. We have developed an extensive network across five continents, connecting the world through our hub in Abu Dhabi with the world’s most modern fleet of aircraft.
“We remain a business that is investing heavily in new routes, in new aircraft and in new infrastructure,” said Mr Hogan. “In 2012, we will add seven aircraft and have already announced plans to extend our network in Asia and Africa.”
“In January, we commenced operations to Tripoli, and Shanghai and Nairobi will follow – all in the first quarter. In July, we will add an additional African destination – Lagos – and will continue to announce new destinations in the coming months.”
Etihad Airways ordered 100 new aircraft and 105 options and purchase rights at the 2008 Farnborough Air Show. This gives flexibility in its network growth, enabling it to meet passenger demand over the next 10 years. To date, Etihad Airways has raised US$5 billion in external fleet financing, through a portfolio of 41 different financial institutions.
Etihad Airways’ accounts are audited by KPMG.