Abu Dhabi, United Arab Emirates (UAE) – Etihad Airways today announced an improvement in core operating performance of 15% in 2018, 7% higher than forecast, on revenues of US$ 5.86 billion (2017: US$ 6.0 billion). The airline reported a loss of US$ 1.28 billion for the year (2017: US$ -1.52 billion).
Since commencing its five-year transformation programme in 2017, the airline has improved its core operating performance by 34% despite challenging market conditions and effects of an increase in fuel prices.
Etihad carried 17.8 million passengers in 2018 (2017: 18.6m), with a 76.4% seat factor (2017: 78.5%) and a decrease in passenger capacity (Available Seat Kilometres (ASK)) of 4% (from 115.0 billion to 110.3 billion).
The airline increased yields by 4%, largely driven by capacity discipline, network and fleet optimisation and growing market share in premium and point-to-point markets. Passenger revenues remained steady at US$ 5.0 billion.
Etihad Cargo recorded a strong performance for the year largely due to a lower cost base, a programme of efficiency improvements including the consolidation of the freighter fleet around the Boeing 777F, and a refreshed network focusing on core trade lanes leveraging Abu Dhabi’s geographical position to maximise freighter to belly-hold flows.
Cargo revenue for the year was US$ 827 million (2017: US$ 877m) with 682,100 leg tonnes carried (2017: 853,300 tonnes). Cargo Freight Tonne Kilometres (FTK) decreased by 21% (from 4.3 billion to 3.4 billion), with a 15.5% increase in yields.
The airline significantly reduced total costs by US$ 416 million to US$ 6.9 billion (2017: US$ 7.3bn). Direct operating costs were reduced by US$ 226 million (3.6%) despite ongoing fuel price volatility. Administration and general expenses declined by US$ 190 million (19%), mainly driven by lower indirect manpower and other administration costs.
Tony Douglas, Group Chief Executive Officer of Etihad Aviation Group, said: “In 2018, we continued to forge ahead with our transformation journey by streamlining our cost base, improving our cash-flow and strengthening our balance sheet.
“Our transformation is instilling a renewed sense of confidence in our customers, our partners and our people. As a major enabler of commerce and tourism to and from Abu Dhabi, we are intrinsically linked to the continued success of the emirate.”
Operational Highlights
During 2018, Etihad Airways took delivery of eight new aircraft including three Boeing 787-9s, four Boeing 787-10s and one Boeing 777-200 freighter. The airline’s fleet count at year end was 106, with an average age of only 5.7 years.
Following negotiations with Airbus and Boeing, revisions to Etihad’s forward fleet commitments were announced on 14 February 2019. Under these agreements, the airline will take delivery of five Airbus A350-1000, 26 Airbus A321neo and six Boeing 777-9 aircraft in the coming years.
Etihad added Baku and Barcelona to its global network in 2018. Both routes are outperforming forecasts. Frequencies were increased to several destinations including Toronto, increasing weekly services from three to five, double-daily flights to Amman and Rome, and 11 weekly flights to Male, Maldives. Additionally, Etihad introduced its 787-9 on flights to Cairo, Casablanca, Jeddah, Rabat, Geneva, Kuala Lumpur and Rome. In October 2018, the airline introduced the Airbus A380 on a second daily flight to Paris Charles de Gaulle. New 787-10 aircraft were introduced on daily flights to Jeddah, Beijing, Nagoya and Seoul Incheon. A seasonal frequency increase using the 787-9 was introduced to London Heathrow, boosting daily services to four during the busy festive season.
Etihad recently announced the addition of the 787-10 on its Shanghai service and the 787-9 on flights to Chengdu, Hong Kong and Barcelona in 2019. Etihad will also add the Airbus A380 on its daily rotation to Seoul Incheon from 1 July, capitalising on this route’s strong business and leisure demand.
A number of unprofitable routes were discontinued in 2018 including Tehran, Jaipur, Entebbe, Dallas / Fort Worth, Ho Chi Minh City, Dhaka, Dar es Salaam, Edinburgh and Perth.
The airline continued to forge important partnerships with other airlines and transport companies last year, including Saudia, Azerbaijan Airlines, Swiss, and Accesrail, adding to a growing list of 55 codeshare partners. Etihad has expanded its reach to more than 400 destinations worldwide by placing its EY code on 18,513 weekly flights beyond its own network.
On-time performance was 82% for flight departures and 84% for arrivals in 2018, making Etihad among the most reliable and punctual airlines in the world. Across its network, the airline completed 99.7% of scheduled flights.
Customer Proposition
Etihad continues to position itself as an airline of choices, embedding its ‘Choose Well’ brand in every part of the customer experience. The airline now provides greater levels of personalisation, with a particular focus on its inflight retail offering, unbundling of services and fares, and installation of new seating products - including a new Economy Space zone on much of its widebody fleet.
In the second quarter of 2019, smarter ergonomic seating and streaming technology will be introduced on the short-haul Airbus A320 and A321 fleets. The airline continues to refine its award-winning Business and First Class services across its widebody fleet, and The Residence on its Airbus A380s.
“Etihad remains a strong global aviation brand and a true representative of Abu Dhabi around the world. We are committed to developing commercially beneficial partnerships at home and overseas, creating a multicultural workplace which is an exemplar of inclusion, gender equality and innovation. This is particularly important in the UAE’s Year of Tolerance,” continued Mr. Douglas.
People and Organisational Development
Etihad announced a new streamlined organisational structure in July 2018, providing greater focus on its customers and its transformation.
Etihad also continued its development of young UAE talent. By the end of 2018 it employed 2,525 Emiratis, representing 12% of the total 21,855-strong Etihad Aviation Group workforce.
Mr. Douglas added: “At only 15 years old, Etihad is maturing as an acclaimed international airline, seizing opportunities and heading into the future as a pioneering leader. We will continue to offer superior services to every traveller while growing our global footprint, embracing technology, boosting revenues, and driving efficiencies and commercial excellence across the entire organisation. The benefits of these actions will be enjoyed by our customers and our people.”
2018 results
2018
2017
Passenger Revenue (US$ billion)
5.0
Cargo Revenue (US$ million)
827
877
Total revenue (US$ billion)
5.9
6.0
Core airline profit (loss) (US$ billion)
(1.28)
(1.52)
Total passengers (million)
17.8
18.6
Available seat kilometres (billion)
110.3
115.0
Seat factor (%)
76.4
78.5
Number of aircraft
106
115
Cargo tonnage (leg tonnes ‘000)
682.1
853.3
[Note] Results published for 2018 are for core airline operations only and exclude any extraordinary or one-off items
