Etihad Airways reports core operating profit of $296m in H1 2022, as travel demand recovers

UAE’s Etihad Airways announced its financial and operating results for the first half of 2022, posting a core operating profit of $296m.

This is a substantial turnaround from its H1 2021 loss of $392m. The result was achieved despite fuel costs increasing by almost 60 per cent in comparison to the same period last year.

The Abu Dhabi based carrier, carried 4.02 million passengers in H1 2022, over 3 million more than last year, with an average seat load factor of 75 per cent.

Passenger loads increased consistently over the first six months, rising by 21.9 per cent points as travel demand recovered. The airline saw a strong boost in passenger volumes in February as Abu Dhabi further relaxed pandemic-related restrictions.

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Network capacity came in at 24 billion available seat kilometers for H1 2022, growing by 46 per cent compared to last year, as the airline connected Abu Dhabi to 71 passenger and cargo destinations across 45 countries.

The first half of the year saw Etihad launch five summer services, including new seasonal routes to Heraklion on the island of Crete and the French city of Nice.

Tony Douglas, Group CEO said, “As air travel came roaring back in 2022, Etihad was there to reconnect our customers with their loved ones and take them on their long-awaited vacations, carrying over 4 million passengers to and from our beautiful home of Abu Dhabi.

“Sustainability continued to be a priority area for Etihad as we entered our fuel-efficient A350-1000s into service and continued our industry-leading decarbonisation efforts, leading to Etihad being recently named ‘Environmental Airline of the Year’.”

Etihad’s passenger revenues tripled in the first six months of the year, climbing to $1.25bn as more business and leisure travellers returned to the air. This was supported by more countries across Etihad’s network relaxing their Covid-related travel restrictions.

Cargo operations continued to deliver revenues of $802m in the first half of 2022, representing an increase of 6 per cent on the same period last year. Revenues remained strong despite the increase in passenger volumes limiting belly-hold capacity, leading to a 19 per cent reduction in freight carried (295,020 tonnes).

As a result of a constant focus on cost containment, fixed overhead and finance costs decreased in H1 2022, falling by 9 per cent (or $29m) and 13 per cent (or$22m) respectively.

Etihad Guest, the airline’s loyalty programme, delivered some new member acquisitions in June 2022, increasing to 7.95 million members globally. Flight redemption increased 15 per cent in H1 2022 compared to pre-pandemic levels in 2019, with over 737,000 flights taken, and member engagement levels translated into record card spends across the programme’s portfolio of UAE banks, supported by a new partnership with Emirates NBD.

Adam Boukadida, CFO of Etihad concluded,”In the first half, we managed to further reduce our fixed overhead and finance costs by $50m compared to H1 2021, reduce the level of debt on our balance sheet, and improve our earnings before interest, taxes, depreciation and amortisation by more than $600m. While ramping up our operations and recording a four-fold increase in passenger volumes, we kept a tight hold on our cost base. As a result, our operating costs only rose by 26 per cent despite a 46 per cent increase in deployed capacity.”