Etihad Airways has posted a record half-year profit for the first six months of 2022 after witnessing a post-pandemic surge in travel demand, coupled with continued strong cargo demand and making gains from heavy cost-cutting.
Between January and June 2022, the Abu Dhabi-based carrier said it made a core operating profit of US $296 million, compared to a near $400 million loss during the same period in 2021.
Etihad has been fighting to turn its financial performance around since 2016 when its recorded a mammoth $1.87 billion loss. The government-owned aviation group had managed to reduce those losses to $870 million in 2019 but the pandemic pushed annual losses to $1.7 billion for 2020.
Chief executive Tony Douglas has pursued a fierce cost-cutting programme to transform the bloated airline into a much smaller carrier and hopes to have achieved a “complete turnaround” of the business by 2023.
“It’s great to be here on the back of a really good quarter four last year and six outstanding, record-breaking months for us,” commented Etihad’s chief financial officer Adam Boukadida on Thursday after the results were published.
Boukadida said ‘revenge travel’ in which passengers are willing to splurge money just for the opportunity to travel after years of pandemic-induced isolation had helped to buoy the airline’s profits.
“The increase in passenger numbers and yield continues to be positive,” Boukadida continued. “It’s been four-and-half years of transformation, with an agile model, hard teamwork and grit… we’re a one-off case study in the best possible way and we’ve earned our grey hair.”
In an effort to dramatically cut costs, Etihad has ripped out seat back entertainment screens from most of its short-haul single-aisle aircraft, introduced ‘buy on board’ food and drink for Economy passengers, grounded inefficient aircraft, and introduced a whole raft of ancillary revenue streams
Etihad’s Airbus A380 superjumbos remain grounded and the airline is yet to commit to returning them to the skies because the quad-engined aircraft are such massive gas guzzlers.
In the first six months of the year, Etihad carried 4.02 million passengers – more than three million more passengers compared to the same period in 2021 when Abu Dhabi was still pursuing a strict COVID-19 policy.
Etihad says it now expects to achieve a full-year profit for 2022, although the airline is watching out for uncertainty caused by high fuel prices, the war in Ukraine and rising inflation putting a squeeze on travel budgets.
For August, the airline expects to achieve an average load factor of up to 90 per cent – meaning that for every 10 seats available, nine will be occupied by passengers.
