Etihad Airways, the national airline of the UAE, today reported third quarter revenues of US$ 1.3 billion, up 19 per cent on 2011 US$ 1.1 billion. The record revenues reflected passenger numbers up 23 per cent, with 2.79 million travellers in the quarter 2.27 million.
Seat factors of 81.2 per cent mark the best ever quarterly performance by the airline, with passenger numbers on track to pass the 10 million milestone in 2012.
The rise in revenues continues to outperform the airline’s growth in capacity and Etihad Airways remains confident of achieving full year profitability for the second year running.
Passenger revenues were boosted by codeshare and partner revenues, which jumped 51 per cent to US$ 182 million (US$ 121 million). The airline's 38 partners helped to create a total network of 315 destinations, more than any other Middle Eastern carrier.
A significant contribution came from airberlin, in which Etihad Airways holds a 29.21 per cent equity stake. The two airlines' extensive codeshare and joint marketing agreements have delivered US$ 51 million in revenues to Etihad Airways year-to-date, surpassing the initial full year estimates.
Etihad Airways and airberlin have delivered a combined total of more than 150,000 passengers into each other’s networks so far this year.
Etihad Airways and airberlin have established a foundation for further cost synergies through mutual maintenance programs, the integrated 787 Dreamliner program and international sales representation.
Air Seychelles, in which Etihad holds a 40 per cent stake, continues to grow revenues through increased frequencies and codeshares, with four flights to Abu Dhabi now offering 375 sub-four hour onward connections a week. Air Seychelles is also reducing costs as it leverages synergies, sharing economies of scale and integration of back office functions with Etihad Airways in Abu Dhabi.
Air Seychelles remains on track to break even in 2012, in the first year of Etihad Airways’ five-year management contract, confirming a dramatic turnaround in the airline’s economic fortunes after several years of heavy losses.
Virgin Australia, in which Etihad Airways now holds a 10 per cent stake, continued to deliver a strong contribution, with codeshare revenues to Etihad Airways up 16 per cent year-on-year.
James Hogan, Etihad Airways’ President and Chief Executive Officer, said: "Our third quarter saw continued progress across the business, with all key indicators showing strong performance and we remain confident of delivering full year profitability based on current market conditions.
"We are particularly pleased with the contribution from our codeshare and equity partners. This component of our strategy is delivering a strong and growing revenue stream, complementing our own double-digit organic growth."
Revenue from codeshare partners represented 18 per cent of Etihad Airways’ total passenger revenue in the quarter.
During the quarter, Etihad Airways signed interline and codeshare agreements with Aer Lingus, China Eastern Airlines and RAK Airways, further expanding the network’s footprint.
Etihad Airways continued to drive down costs, with costs per available seat kilometre (CASK), excluding fuel, falling to their lowest levels this year. An independent benchmarking study by aviation consultants Seabury shows that Etihad Airways is in the lowest cost quartile for CASK, when compared to major international full service airlines.
Fuel remained the single largest operating cost for the business and represented 37 per cent of total expenditure for the quarter. Etihad Airways has 80 per cent of its fuel hedged at price levels well below current market prices with 21 leading international financial institutions for the remainder of 2012, as part of a three-year rolling hedging program.
James Hogan added: "We continue to face an incredibly tough operating environment. Fuel prices remain high and the global economy still carries challenges. The Eurozone remains in trouble and there is still some softness in a number of Middle Eastern markets.
"However, the wide segmentation of our business is helping to ensure our continued profitable growth. Australia and our major Asian markets are performing strongly. Our routes into China - Beijing, Shanghai and Chengdu - are showing particular potential, which will be further boosted by the strong growth of connecting markets into Africa and our codeshares.”
Etihad launched daily services to Lagos during the third quarter, with new routes soon to open to Ahmedabad (November 1) and Addis Ababa (November 2). New routes to Washington DC, Sao Paolo and Ho Chi Minh City have already been announced for 2013.
The growth of the network will be further supported by the delivery of three new aircraft in the next three months – two Airbus A320s and one three-class Boeing 777-300ER - with a further 14 due for delivery in 2013 (six Boeing 777-300ER, five Airbus A320/A321, two Boeing 777 freighters and one Airbus A330 freighter).
Cargo revenues were significantly ahead of last year, up six per cent to US$ 181.6 million. The airline's dedicated freighter fleet of six aircraft now serves eight cargo-only destinations (Amsterdam, Benghazi, Dubai, Hahn, Hong Kong, Djibouti, Kabul and Sharjah) in addition to the wider Etihad Airways network.
Freighter services were launched to Dammam and Doha during the quarter, increased to Libya and Italy, and upgraded to Hong Kong.
Etihad Cargo carried 93,560 tonnes of freight in Q3, 18 per cent more than in the corresponding period last year (79,378 tonnes), with customers being offered more choice of destinations from the airline’s newly launched passenger services.
Also rapidly growing is the number of UAE nationals working for Etihad Airways, with the 1,000th Emirati member of staff joining the company. Also during this quarter, UAE nationals have become the largest nationality group at Etihad, a significant move in ranking from ninth position in 2008.
Emiratis now make up 21 per cent of the airline’s core employee workforce and the Emiratisation scheme, launched in 2007, offers a wide range of career opportunities for UAE nationals, including programs for cadet pilots, technical engineers, graduate managers, guest service agents and call centre agents.
In 2012 Etihad introduced two new programs attracting UAE nationals to join its global workforce as part of the graduate development program for sales and airport operations. Emiratisation programs currently have over 570 trainees deployed across various streams within the airline.
James Hogan concluded: “The Abu Dhabi Government has identified tourism as one of seven sectors which will lead job creation for Emiratis during this decade. At Etihad, we are proud to be playing our part in delivering on that vision and in supporting the work of the Abu Dhabi Tawteen Council.”