Etihad scores higher profits, stronger growth, lower costs
It’s the winning trifecta for airlines, in 2012 Etihad made more money, cut its costs, and grew its passenger and air freight revenues. What it will do for an encore this year is of more than idle interest.
Virgin Australia equity and alliance partner Etihad Airways has posted its second full year profit in a row, which trebled on a net basis from $US 14 to $42 million in 2012 compared to 2011, including strong growth in passenger and freight revenues.
The Abu Dhabi based carrier has just reported the following vital signs:
- Passenger revenues grew from $US 4.1 billion to $4.8 billion of which 19% came from what Etihad calls its equity alliance partners in which it holds 40% of Air Seychelles, AirBerlin (29.2%) Virgin Australia (9%) and Aer Lingus (2.99%).
- Etihad’s CEO James Hogan detailed growth in revenue passenger kilometers outstripping the rise in available seat kilometres to drive its fleet load factors up 2.4% to 78.2%.
- Unlike its larger rival Emirates in nearby Dubai, Etihad has a network that includes shorter stage single aisle services as well as long haul flights.
- According to contacts, air freight in the last year has been the star turn, in sharp contrast to the tonnage downturns that have hampered profitability in major SE Asia carriers which are highly dependent on the one-way China/Asia-US trade in finished tablets, smart phones and laptops.
- Total tonnages grew 19%.
The airline also reported an independently audited reduction of non fuel costs of five percent per available seat kilometer.
There is something of a guessing game underway as to Etihad’s next moves. It has been reported as being in negotiations to acquire an interest in an India carrier, and has been developing a co-operative relationship with Air France KLM which has spared it much of the hostility directed at other high profile Gulf carriers by major EU carriers.