Etihad revenues surge

Etihad Airways announced on Tuesday a revenue increase of $989 million in the first quarter of 2012, 28 per cent more than in the corresponding period of last year. The number of passengers too has grown by 500,000 to 2.4 million. “We met all our revenue targets and budget estimates in the first quarter, despite the challenging economic conditions confronting the international community,” said James Hogan, Etihad CEO. “Part of the reason for this increase is our prices. We have competitive prices, not the cheapest, but competitive. We have people monitoring the prices of other airlines every day, so we keep competitive,” he told Khaleej Times. The revenue passenger kilometres, which is a measure of the volume of passengers carried by an airline, has also risen during the first quarter by 26.6 per cent to $10.9 billion, because of growth in available seat kilometres (measures an airline’s passenger carrying capacity). “We are flying with fuller planes across the network and our codeshare partnerships played a major role in this growth, accounting for 18 per cent of our revenues in the quarter,” Hogan said. Despite tough economic times worldwide, Etihad is doing well enough to keep pushing for further expansion in the next 18 months. This includes a daily service to the airline’s first destination in South America — yet to be announced — and a new service to Vietnam. Earlier this year Etihad announced the launch of non-stop flights to Washington DC and it began flights to Tripoli, Shanghai and Nairobi. Services to Basra and Lagos will start soon, as will the number of flights to Dusseldorf, Bangkok, Cairo, Kuwait and Dammam. Extra capacity will also be added to London Heathrow and Kuala Lumpur. All in all, the airline now operates in 84 cities in 54 countries. “We continue to outperform much of the global airline industry, with spectacular growth in revenue, the number of passengers flown and freight carried,” said Hogan. “Our seat factor hit a record high but yields, particularly in the premium cabins, remain a challenge.” This year, Etihad will take delivery of seven new aircraft, three Airbus A320 and four Boeing B777, with the first three-class B777-300ER deployed on the London route from July. This will bring the carrier’s fleet to 71 aircraft by the end of 2012. Escalating fuel costs had a major impact on aviation industry in these past three months. Yet, Etihad claims it is under control. “Fuel prices are our largest variable cost and they are tracking higher than 2011. We remain committed to an active fuel hedging strategy. Eighty percent of our first quarter’s fuel costs were hedged and we currently have 74 percent of fuel costs hedged for the rest of 2012,” explained Hogan. Also doing better than the industry’s freight markets, which slowed down worldwide, Etihad Cargo’s revenues actually went up by 12.2 per cent to $159 million. The airline’s freighter flights did particularly well into Central Asia and Libya. As a result, Etihad ordered two new freighters this year, which will be delivered in 2013 and 2014.