Soaring revenues take Etihad to record

Etihad Airways yesterday posted a record jump in second-quarter revenues on the strength of surging passenger numbers, and said it was on track for a successful full-year performance despite challenging market conditions.The airline said it earned US$1.25 billion (Dh4.59bn) over the second three months of this year, compared with $957 million over the same period last year – a jump of 30 per cent. Passenger numbers were up 34 per cent for the quarter, at 2.55 million, and now stand at 4.89 million for the first half. Revenue for the first half now stands at $2.24bn, up 29 per cent from $1.73bn for the first half last year. The record results were boosted by the airline’s growing network of codeshares and strategic partnerships, which together fed 800,000 passengers into Etihad’s network in the past six months, and contributed $281m. During the quarter, Etihad took minority equity stakes in Aer Lingus and in Virgin Australia, adding to its minority shareholdings in Air Berlin and Air Seychelles. Together, these five airlines carried 72 million passengers on 376 aircraft last year, generating combined revenue of more than $14bn, said the airline. James Hogan, the president and chief executive of Etihad, declined to say how much of the revenue was profit, but said the airline’s performance had “exceeded our budget objectives”, and that he was looking forward to “a very strong” third quarter. “These results are an endorsement of our strategy, which has seen us widen and deepen our partnerships in addition to continued focus on our organic growth plan,” said Mr Hogan. “In a quarter when many airlines have seen demand softening, we have been able to add more passengers than ever before, with growth outstripping our capacity increases. We are also seeing Abu Dhabi growing as a hub. Our traffic figures for the year so far show more traffic coming our way, especially going to and from South East Asia and Australasia. “We are also encouraged by the performance of our equity-partner airlines. Air Seychelles has made significant strides towards profitability in its own right, and I am confident it will break even this year. “Last month, Air Berlin, which is now our most important commercial partner, reported faster-than-expected progress of its [restructuring] programme and a positive outlook for its financial performance. “We are very pleased to see the projected revenue benefits and cost synergies for both Etihad Airways and our partners tracking in line with, or even above plan, which shows once more that our partnership strategy delivers value to all parties’ shareholders. “However, this continues to be a tough operating environment for all airlines. But our strategies allow us to drive quality revenue and we remain focused and on track to deliver profitability for the full year, for the second year running.” Six new aircraft were added to Etihad’s fleet, taking it to 67 aircraft in service, helping the airline to record a 25 per cent rise in available seat kilometres to 15.2 billion in the second quarter, up from 12.2 billion for the same period last year. Revenue passenger kilometres rose 33 per cent to 11.8 billion. The average seat factor was 4.6 percentage points higher in the quarter compared with the same period the previous year, resulting in the carrier’s aircraft, on average, flying with 77.6 per cent of seats occupied. Etihad Cargo had another strong quarter, with loads rising 22 per cent to 90,000 tonnes, contributing to revenue of US$183m, up 11 per cent. There was strong growth in particular in Germany, the United Kingdom and Bangladesh. Etihad launched routes to Basra and Nairobi during the quarter, and started an Abu Dhabi-Lagos service on Sunday, expanding its direct network of cities served up to 87. It also announced new codeshare agreements that brought its total passenger network up to 308 destinations, by far the largest of any Gulf carrier. Last month, Etihad unveiled plans to launch daily flights to Sao Paulo in Brazil, its first South American destination, to start next June. The airline also continued to make considered investments in marketing, products and services, such as new lounges, the introduction of onboard chefs in its Diamond First Class cabins and the launch of a global television advertising campaign. The airline continues to keep a tight focus on costs, with non-fuel costs per available seat kilometre down 1 per cent, said Mr Hogan. Etihad’s results follow the publication of monthly traffic figures for May by the International Air Transport Association (Iata), which showed Middle Eastern carriers led the industry in traffic growth. The Middle East was the only region to record double-digit growth for international passengers, up 15.8 per cent year-on-year. “Middle East carriers were the only ones to report aggregate accelerated demand growth compared to April, when the region’s airlines reported 15.2 per cent growth,” Iata said. Iata also noted the recent fall in oil prices had been “offset by the continued and deepening European sovereign-debt crisis, which had led markets to expect a further deterioration and damage to economic growth”.