Aviation

Etihad profit soars on passenger and cargo volumes

November 14, 2024, 4:39 PM

The opening of the new Terminal A at Abu Dhabi’s Zayed International Airport last November has allowed Etihad to expand its flight options

Nine-month profit up 66%
Cargo revenue reaches $808m
Working on IPO readiness

Etihad Airways has reported a 66 percent increase in nine-month profit built on higher passenger and cargo revenue.

The Abu Dhabi carrier said profit after tax for the period reached $381 million (AED1.4 billion), up from $222 million a year earlier.

Total revenue was up 21 percent to $5 billion, which the airline said was driven by a strong summer season in which new routes were added and it recorded double-digit growth in its cargo business.

“This impressive growth is driven by strong results in both passenger and cargo revenues, underscoring the effectiveness of our strategy and the strength of our growth trajectory,” said Antonoaldo Neves, CEO of Etihad Aviation Group.

Passenger numbers rose 35 percent during the nine months, during which revenue increased by 21 percent to $4.1 billion, the airline said. Average passenger load – how full the aircraft are – was 87 percent, up slightly from 86 percent last year.

The airline’s cargo revenue reached $808 million for the nine months, up 21 percent on the previous year, which Etihad said was driven by increased capacity, higher volumes and improved yields.

Despite increased operating costs, Etihad said its cost per available seat kilometre (excluding fuel) was reduced by 8 percent.

The opening of the new Terminal A at Abu Dhabi’s Zayed International Airport in November last year has allowed the airline to expand its flight options in more convenient time slots.

Neves said in September that Etihad is planning to invest $7 billion over the next five years and to double the size of its fleet by 2030 as it prepares for an initial public offering.

The airline is owned by Abu Dhabi Developmental Holding Company (ADQ), a sovereign wealth fund, and Abu Dhabi Developmental Holding Company.

Neves said the timing of the IPO will be when its “shareholder ADQ decides to”, but said Etihad is “working hard on its readiness to be listed”.

Etihad reintroduced the fifth of its 10 A380s during the summer, and has plans to bring back two more in the next six months.

Neves said the airline will start retrofitting and revamping its Boeing 787 and 777 planes from 2026 onward. The cost of the retrofit programme is estimated to be nearly $1 billion, he told Bloomberg in an interview on Wednesday.

John Grant, a partner at UK consultancy Midas Aviation and an AGBI columnist, said it was “good news” that the results were better than last year, but they needed to be seen in context.

“With load factors of 87 percent it is likely that on many routes, unless there is more capacity growth, then volumes will be capped and Etihad will be looking for higher fares to fill those few seats that are left.”

Grant believed that this indicated that “network growth and capacity development will be key in the next few years”, especially as the Abu Dhabi airline faces new competition from new Saudi airline Riyadh Air, which is set to launch next year.

Air traffic in the Middle East and North Africa region up to the second quarter of 2024 has surpassed levels seen before the pandemic, with the UAE and Saudi Arabia reporting the highest gains in volume.

Despite extra volume in flights, international airfares in some countries remain elevated, experts told AGBI earlier this month. In the UAE, fares increased by 22 percent, while in Oman they rose by 10 percent.