Etihad Airway's transformation continues

The airline posted a much-reduced loss of US$ 476 million for 2021 (2020: US$ 1.70 billion).

It carried 3.5 million passengers in 2021, with an average seat load factor of 39.6%. Passenger loads doubled in the second half of the year, reaching 70.1% in December as travel demand peaked during the winter holiday period. The airline recorded a particularly strong surge in passenger volumes in Q4 following the September relaxation of mandatory quarantine periods in Abu Dhabi.

Network capacity came in at 37.21 billion ASKs for the year, with the airline connecting Abu Dhabi to 71 passenger and cargo destinations across 47 countries. The airline launched or restarted operations to 13 destinations in 2021, most notably introducing scheduled services to Tel Aviv following the normalisation of relations between the UAE and Israel.

Etihad Airways posted passenger revenues of US$ 1.07 billion in 2021, down by 14% year-on-year. While ongoing travel restrictions and new variants of the virus dampened demand, the airline saw passenger revenues bounce back in the last quarter of the year, recovering to 50% of 2019 levels in December.

Cargo operations meanwhile continued to outperform expectations, with a 27% year-on-year increase in freight carried in 2021 (729,200 tonnes) coupled with a rise in cargo revenues of 49% to US$ 1.73 billion, the highest figure in the history of the airline.

Tony Douglas, Group chief executive officer, commented: "In another year of global uncertainty, Etihad Airways has continued to move forward, strengthen its business, and build on its world-class travel proposition. As always, this has been thanks to our remarkable people who have gone above and beyond to make the most of every opportunity. Despite the slowdown caused by Omicron, we are confident that the spring and summer season will continue to see a resurgence in travel as more people return to the skies.

“We look forward to our guests being able to experience our state-of-the-art Airbus A350s when they debut later this year, taking pride of place alongside our Boeing 787s. With one of the most fuel-efficient fleets in the world and with sustainability at the very top of our agenda, we will continue to pave the way for more sustainable flying in 2022 and beyond.”

As operations progressively ramped up throughout 2021, Etihad maintained an absolute focus on cost control, decreasing operating costs by a further US$ 110 million, despite a US$ 197 million increase in fuel costs driven by rallying oil prices.

Fixed overhead costs and finance costs also recorded a significant reduction, decreasing by 14% (or US$ 110 million) and 20% (or US$ 90 million) respectively. As a result, the airline managed to maintain strong liquidity in 2021.

Overall, Etihad recorded a core operating loss of US$ 476 million for fiscal year 2021, representing a 72% improvement compared to 2020 (US$ 1.70 billion) and a 41% improvement against pre-pandemic results in 2019 (US$ 802 million). EBITDA improved by more than US$ 1 billion, turning to positive US$ 408 million from a negative US$ 651 million in 2020.

Adam Boukadida, chief financial officer, said: "Despite Covid-19 suppressing global travel demand for a second year running, we have continued to transform Etihad Airways into a more efficient business, delivering additional line-by-line savings and further optimising our cost base. Our record cargo operations have provided much-needed uplift, helping to more than double monthly operating revenue between January and December.

“Pushing the frontiers of sustainable financing, we issued the first-ever sustainability-linked ESG loan in aviation, while at the same time reducing our outstanding debt by more than 20%. All these factors combined resulted in a strong year-end liquidity position, aligned to our pre-pandemic levels, and in a steadfast 'A with a stable outlook' credit rating reaffirmed by Fitch."