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UAE. Etihad Airways, the national carrier of the United Arab Emirates, today announced record financial results for 2013, with net profit up +48% to US$62 million on revenues up +27% to US$6.1 billion.
The news emerged as the company announced the creation of the Etihad Aviation Group, a new structure marking the transition from a single entity airline to a wider global aviation body.
The group includes Etihad Airways, the newly formed Hala Group including travel and tourism management and global loyalty companies, Etihad Airport Services, and group support functions. New executive appointments include Etihad Airways Chief Operating Officer, Hala Group Chief Operating Officer and a Chief Operating Officer Equity Partners, who will oversee investments in other airlines (see below).
Revealing the annual results today, Etihad Airways President and Chief Executive Officer James Hogan said: “This is another important step forward in our journey as a growing, commercially successful business. We have hit every financial target for each of the last seven years, bringing sustainable profitability to a business which has grown from just US$300 million in revenues in 2005 to more than US$6 billion today.
“We are particularly pleased to deliver a return for our shareholder, while also playing a major role in the development of trade and tourism within the emirate of Abu Dhabi.”
Revenue increased by +27% on passenger numbers up +12% 11.5 million. The record performance also saw earnings before interest and tax (EBIT) up +22% to US$208 million and earnings before interest, tax, depreciation, amortisation and rentals (EBITDAR) up +30% to US$979 million, a margin of +16% of total revenues.
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This marked the third successive year of net profitability, in the airline’s tenth year of operation.
Revenue Passenger Kilometres (RPKs) – measuring passenger journeys – increased by +16% to 55.5 billion (47.7 billion), while Available Seat Kilometres (ASKs) – representing capacity – grew by +17% to 71.1 billion (61 billion).
These figures reflected strong growth in passenger traffic volumes, as Etihad Airways added six new destinations – Washington DC, Amsterdam, São Paulo, Belgrade, Ho Chi Minh City and Sana’a – and increased capacity on 18 existing routes.
The airline has announced nine new destinations for 2014 – the US cities of Los Angeles and Dallas-Fort Worth, the European gateways of Rome and Zürich, Jaipur in India, Perth in Western Australia, Phuket in Thailand, Medina in Saudi Arabia and Yerevan in Armenia.
In November, 2013, coinciding with its tenth anniversary, Etihad Airways signalled its long-term growth intentions when it announced the largest fleet order in its history, for up to 199 aircraft and 294 engines, at a current list price of approximately US$67 billion.
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Etihad Airways: From US$300 million in revenues in 2005 to more than US$6 billion today |
In addition to new aircraft, Etihad Airways added new products during 2013, with initiatives including airport lounges in Washington DC and Paris, new Business Class and First Class lounges in Abu Dhabi, and the start of a programme to introduce on-board Wi-Fi, mobile phone connectivity and live television on board.
The airline also launched its Flying Nanny service, introducing more than 750 cabin crew members who have been specially trained to assist families travelling with young children.
“Against a difficult economic and geopolitical environment, and fierce competition in key markets including the Middle East, Europe, Asia, Australia and the Americas, the 2013 results mark an outstanding performance,” said Hogan.
“The global market remains challenging in 2014 but the macroeconomic picture is improving in key economies around the world. We believe our new model, and the investments we have made in product, service and infrastructure, mean that Etihad Airways is positioned strongly for top-line growth and bottom-line delivery.”
New structure
As noted above, the company today also announced the next step in its long-term business strategy, with the creation of the Etihad Aviation Group.
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The Moodie Blog: Live from 35,000 feet onboard Etihad Airways |
| I may talk to Etihad and suggest that I simply live on their planes for one year, blogging about my experiences and traversing the globe in line with this brilliant airline’s burgeoning route network. |
Hogan said: “Ten years ago we started life as a small regional carrier, but with global ambitions. Since then we have grown to become one of the world’s leading passenger and cargo airlines, and have expanded and diversified our operations outside the core airline business laying the foundations to become one of the leading aviation and travel groups in the world.
“It is important that this exciting new approach and philosophy is reflected in the way we organise ourselves. The new Etihad Aviation Group structure reflects this diversification and is a natural development to deliver continued and sustainable success for Etihad Airways and its partners.”
A new position of Chief Operating Officer Etihad Airways has been created to oversee the day-to-day running of the core airline. Recruitment for this position continues and the candidate will oversee the major areas of Marketing, Sales, Operations, Technical, Cargo, Flight Operations, Guest Services, Guest Experience, and Safety and Quality.
In addition to the core airline, the Etihad Aviation Group also includes a division to coordinate and manage Etihad’s investment in its equity airline partners, and a new role of Chief Operating Officer Equity Partners will be created within the new structure to ensure an interface between the airline and its equity partners.
The position will be responsible for overseeing the equity alliance, as well as having direct responsibility for Air Seychelles and Air Serbia in which Etihad Airways has a management responsibility.
A key element in the new structure is the establishment of the Hala Group, led by Chief Operating Officer Hala Group Peter Baumgartner (formerly Chief Commercial Officer at Etihad Airways).
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Hogan: “Against fierce competition in key markets… the 2013 results mark an outstanding performance” |
The Hala Group will bring businesses together to drive commercial value for Etihad Airways, for Abu Dhabi and for the airline’s equity alliance partners. It combines travel management provided by Hala Travel Management, destination management services of Hala Abu Dhabi, the internationally expanding wholesale and tour operating business, Etihad Holidays, and other major start-up initiatives such as a new global loyalty company.
Functions providing support to the wider Etihad Aviation Group will continue to be led by James Rigney as Group Chief Financial Officer, Ray Gammell as Group Chief People and Performance Officer, and Kevin Knight as Group Chief Strategy and Planning Officer. There will also be a new position of Group Chief Technology Officer for which recruitment is also ongoing.
Hogan added: “These are very exciting developments for our business and the strong team we have created in our new structure will greatly enhance and improve the way we work in harmony with our partner airlines and subsidiaries.
“It will ensure that we work more closely than ever before to maximise the tremendous opportunities and deliver a sustainably profitable future for Etihad Airways and wider Etihad Aviation Group members, while ensuring we meet ambitious targets relating to revenue, cost, and synergy benefits.”
