Etihad Airways could post annual profit for 2022, ahead of plan, CEO says
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Etihad Airways could post annual profit for 2022, ahead of plan, CEO says

Etihad Airways could post annual profit for 2022, ahead of plan, CEO says

Tony Douglas confirmed that the carrier turned profitable in the first quarter

Etihad Airways turned profitable in the first quarter, according to chief executive officer Tony Douglas, who said it’s possible the Gulf carrier can post positive earnings for all of 2022, one year ahead of schedule.

While the surge in oil prices following the Ukrainian crisis will raise costs over coming months, earnings should get a further boost in the fourth quarter as demand rises toward the annual peak, Douglas said in an interview Thursday at the CAPA Airline Leader Summit in northwest England.

“Subject to closing the books we’re on for being profitable in Q1, which is fantastic,” the CEO said. “The jury is well and truly out” on whether the Abu Dhabi-based company will remain in the black over the full 12 months, he added. “We targeted it for next year but we’ve got off to a great start this year.”

Etihad has coped better with the coronavirus crisis than many other airlines after a downsizing from 2017 slashed its cost structure and repositioned the company as a mid-size carrier. The overhaul helped prepare Etihad for the pandemic, Douglas said.

Douglas said the slimmed down Etihad is also more nimble and able to redeploy capacity amid changing market conditions. About 90 per cent of the timetable is fixed but the rest is flexible depending on where demand is strongest.

Etihad has also introduced seasonal flights, operating to locations such as Nice in France and holiday islands in Greece during the summer that have proven popular with Emiratis seeking to escape Abu Dhabi’s searing heat.

Etihad purchases around 52 per cent of its fuel in Abu Dhabi at spot prices and hedges on some of the rest, uploaded in oversees destinations.

The carrier has ditched less-efficient planes including Airbus SE A340s and A330s and Boeing 777s, while its A380 superjumbos are stored in Spain and won’t return to service without a dramatic drop in crude to $65 or less.

That will leave the fleet focused on Boeing 787 Dreamliners and Airbus A350s for the next five years at least, Douglas said. Etihad has 39 787s, and delivery delays at Boeing have provided flexibility on when to take 11 more on order.

A further option is to return leased aircraft if growth in demand stutters and handovers are due, he said.

The carrier has orders for 12 A350-1000s, of which the first five will join the fleet this year, offering flights from US cities including Chicago and New York, with the planes flying on to India to boost utilisation rates.

Etihad is also converting two of eight A350 options, taking its order to 14. A commitment for A350-900s was cancelled, and while the company still has A320neo narrow bodies in its backlog, there are no delivery dates for them, the CEO said. Etihad also has options on Boeing’s new 777X, but holdups to the program mean those aircraft aren’t part of near-term flight plans.

Etihad is continuing to operate a single daily service to Moscow, and the conflict in Ukraine has been roughly revenue-neutral, he said. Flights from Abu Dhabi to parts of North America are having to make diversions of up to 40 minutes to avoid the war zone.

Douglas said a joint venture with Air Arabia that helps feed passengers on to Etihad flights will be scaled up with four more aircraft after posting a profit in 2021, its first year of operations.

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