Etihad recovery continues as operation grows
Etihad Airways has announced operating and financial results for the first half of 2021, showing a progressive recovery across its business despite a slower than expected return to global air travel.
The airline carried one million passengers in H1 2021, with an average seat load factor of 24.9%. This represents an average 10% month-on-month growth in passenger volumes since Etihad restarted passenger operations in July 2020.
Network capacity in the first half of 2021 came in at 16.4 billion ASKs, and has grown steadily since the start of the year, with the airline operating almost 3,500 flights a month to 67 passenger and cargo destinations by the end of June 2021. Since the beginning of 2021, Etihad has launched or restarted operations to 10 destinations including the historic launch of scheduled services to Tel Aviv in April 2021.
As a result of new variants of the coronavirus affecting key travel markets in the Indian Sub-Continent and Europe, passenger revenue came in at US$0.3 billion, down by 68% year-on-year from US$1.0 billion. However, the dip in passenger revenue was offset by strong performance in cargo operations, with a 44% year-on-year increase in freight carried in H1 2021 (365,500 tonnes) and a 56% year-on-year increase in revenue (US$0.8 billion).
Tony Douglas, Group Chief Executive Officer, said: “Every day, Etihad Airways is making up for lost ground. Despite the curveball of the Delta variant disrupting the global recovery in air travel, we have continued to ramp up operations and are today in a much better place than this time in 2020. As soon as destinations are added to the Abu Dhabi green list or UAE travel corridors, we are seeing a three to six-fold jump in bookings in some cases, showing there is a tidal wave of demand waiting to be unleashed. We are ready to welcome more guests on board to experience why Etihad is second to none when it comes to ensuring passenger wellbeing.”
Throughout the first half of 2021, Etihad retained a singular focus on cost control, decreasing operating costs by 27% year-on-year from US$1.9 billion to US$1.4 billion, supported by reduced capacity and volume-related expenses. Fixed overhead costs saw a significant improvement, reducing by 22% to US$0.3 billion, while finance costs reduced by 22% owing to an ongoing balance sheet deleveraging. As a result, the airline managed to rebuild its liquidity position to pre-pandemic levels.
Overall, Etihad recorded a core operating loss of US$0.4 billion for H1 2021 (half the loss of US$0.8 billion in H1 2020), with EBITDA turning to a positive US$0.1 billion from a negative US$ 0.1 billion in the same period of 2020.
Adam Boukadida, Chief Financial Officer, said: “While market demand has been slower to recover than anticipated, our record cargo performance has continued to buoy the business. At the same time, we have continued to strengthen underlying fundamentals to place Etihad in a better position to maximise the value of passenger revenue as our volumes return. Our rock-solid credit rating has remained unwavering throughout the pandemic and was once again reaffirmed at ‘A with a stable outlook’ by Fitch in April 2021, serving as a clear sign of the long-term financial viability of our business. While the pandemic still poses challenges, Etihad is on the path to becoming a sustainable and profitable business.”
Fleet and network
Etihad Airways continued to grow its global network throughout the first half of 2021 as destinations were added to the Abu Dhabi green list and bilateral travel corridors were formed with the UAE.
• The number of passenger destinations grew by 20% in the first six months of 2021, from 50 to 60, as Etihad Airways continued to rebuild air connectivity to the vibrant capital of Abu Dhabi.
• Etihad is currently operating 64 aircraft including five freighters after having taken the decision to indefinitely park part of its fleet as a result of the pandemic. The backbone of the Etihad fleet remains the Boeing 787 Dreamliner, one of the most fuel-efficient aircraft in the world, with 39 B787-9 and B787-10s in the fleet.
• Following the normalisation of diplomatic relations with Israel, Etihad Airways launched a twice per week, year-round service to Tel Aviv in April 2021, strengthening the tourism, business and people-to-people ties between the countries.
• Ramping up to the 2021 summer season, Etihad Airways launched three new seasonal routes in just over 24 hours at the beginning of July 2021, linking Abu Dhabi to two major holiday hotspots in Greece (Mykonos and Santorini) and the famous Costa del Sol in Spain (Malaga).
• European operations were further expanded in July 2021 with the introduction of a new service to Vienna, Austria.
Product and service
In 2021, the airline focused on developing its industry-leading Etihad Wellness programme, launched at the outset of the pandemic to ensure passenger health and safety, as well as trial and launch products and services to support a global return to travel.
• Etihad Airways became one of the first airlines globally to partner with the International Air Transport Association (IATA) on the IATA Travel Pass in January 2021, allowing guests to create a digital version of their COVID-19 test results and speed up check-in at the airport.
• For added convenience, Etihad Airways introduced Home Check-In during May 2021, allowing passengers to check in their bags, choose their seats and collect their boarding pass and luggage tags from their home in Abu Dhabi, skipping the queues at the airport.
• To simplify the process of authenticating travel documents, Etihad established Verified to Fly in May 2021, a service where travellers can validate their documents before arriving at the airport with the confidence that they have met all essential government and airline travel requirements.
Ensuring the health and safety of staff and supporting employees in weathering the pandemic has been a focus area for Etihad Airways in 2021.
• Etihad Airways was one of the first companies in the UAE to offer employees access to a COVID-19 vaccine, and to date, more than 92% of UAE-based staff have elected to take the vaccination.
• As an extra layer of defense, the airline introduced regular PCR testing for all staff in January 2021, which is coupled with rigorous safety measures at work including deep cleaning and sanitisation of facilities to protect staff.
• In February 2021, Etihad became the first airline in the world with 100% of operating pilots and cabin crew on board vaccinated to help curb the spread of the coronavirus.
Etihad Airways has recorded strong results in cargo operations in H1 2021 as it continued to play a critical role in facilitating international trade.
• As a founding member of the HOPE Consortium, an Abu Dhabi coalition formed in November 2020 to distribute COVID-19 vaccines across the world, the airline has carried tonnes of crucial vaccine shipments in support of global vaccination efforts throughout the first half of 2021.
• To date, the Hope Consortium has handled more than 65 million vaccines across 40 countries in the Middle East, Africa, Europe, Asia, and South America.
• The airline’s best-in-class PharmaLife product, which offers a temperature-controlled air cargo solution for pharmaceuticals, has seen a 94% year-on-year increase in shipments compared to H1 2020.
• To provide much-needed cargo capacity, Etihad Airways has temporarily modified five Boeing B777 aircraft to support cabin loading, operating more than 430 charter and scheduled cargo flights with the new configuration.
Etihad Airways has established a comprehensive sustainability strategy spearheaded by its Greenliner programme, with the ambitious target of net zero emissions by 2050. The airline is prioritising a green recovery and has implemented a number of key sustainability initiatives in H1 2021.
• In January, Etihad expanded its carbon offset programme to include Peru’s Cordillera Azul National Park and Indonesia’s Katingan Mentaya Project, both certified by the Verified Carbon Standard and the Climate, Community, and Biodiversity Standard, making Etihad’s efforts geographically diverse in the promotion of climate action.
• Etihad formed a partnership with New Zealand Carbon Offsetting company CarbonClick in January 2021, a platform which uses certified Gold Standard offsets to reduce the climate impact of aviation through ethical, fully traceable reforestation and renewable energy projects, to develop a voluntary guest offset programme.
• In April, Etihad Airways marked Earth Day with its first ecoFlight of 2021. Operating to Rome on the airline’s signature Etihad Greenliner aircraft, the flight was used to trial and showcase technologies, products and services in the name of sustainable aviation.
• The carbon emissions of the Etihad Greenliner aircraft are being completely offset for the entirety of 2021, equivalent to approximately 80,000 tonnes of CO2 emissions, as part of the first carbon offset programme in the region.