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Etihad Reports $62m Profit In 2013

Etihad Reports $62m Profit In 2013

The airline benefited from a 30 per cent increase in partnership revenues, to $820 million, as its equity alliance stable rose to seven airlines.

Etihad Airways recorded a 48 per cent jump in net profits to $62 million last year, on the back of a 27 per cent rise in revenues to $6.1 billion.

The airline benefited from a 30 per cent increase in partnership revenues, to $820 million, as its equity alliance stable rose to seven airlines. Passenger numbers rose to 11.5 million, up 12 per cent.

EBITDAR rose 30 per cent to $979 million and the crucial industry measurement of revenue passenger kilometres (RPKs) rose 12 per cent to 11.5 million. Cargo revenues also contributed significantly, rising 30 per cent to $928 million.

The results are particularly strong given its fuel bill accounted for 40 per cent of total expenses, a number of its equity partners have grappled with losses or restructuring and the precarious state of international aviation.

In recognition of its size, ongoing growth and diverse business interests, Etihad has decided to unveil a new group structure, divided into the airline, newly formed Hala Group (travel and tourism management and loyalty companies), Airport Services and Group support functions – not too dissimilar to the Emirates Group up the highway.

Peter Baumgartner, formerly chief commercial officer Etihad Airways, becomes chief operating officer Hala Group.

CEO James Hogan said its equity investments “are really taking off” allowing it to build integrated networks, develop common services and save costs. Alongside airberlin, Air Seychelles, Virgin Australia and Aer Lingus, Etihad added another three equity partners in 2013 – Jet Airways (24 per cent), Air Serbia (49 per cent) and Darwin Airline (33.3 per cent).

“Our joint purchasing taskforces are delivering real and significant savings across all equity alliance members, giving each of us real competitive advantage through lower unit costs,” he said.

Etihad will receive its first A380s from December – earmarked for London, New York, Sydney and Melbourne – and its first B787 Dreamliners. Hogan confirmed it will serve Scotland next year but declined to say which destination.

James Rigney, Group Chief Financial Officer, said it has already “recouped its full amount” in airberlin, Air Seychelles, Aer Lingus and Virgin Australia. “Every equity investment is set around traffic flows but what we’ve been able to achieve, unlike the global alliances, is significant value on cost reduction,” said Rigney.

But he added it needs to raise $2 billion for new aircraft this year. “Some have already been spoken for, at the moment we have an RFP (request for proposal) for three A330s and two A320s and five B777s will be issued shortly.”

Etihad is in due diligence with Alitalia and declined to give investment details.

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