Etihad Airways today reported its most successful first quarter to date, with revenues up 21.2 per cent to US$ 770 million (Q1 2010: US$ 635 million), attributable to strong performances in both passenger and cargo traffic. Coupled with a 5.9 per cent reduction in costs per available seat kilometre, this delivered positive EBITDAR (earnings before interest, tax, depreciation, amortisation and rentals) in the quarter for the first time.
The results mark continued progress towards the airline’s goal of break-even in 2011 and profitability in 2012.
Passenger revenues rose 15 per cent on the back of a 10.6 per cent growth in passenger numbers, to 1,854,392. Seat factor fell slightly to 72.7 per cent (Q1 2010: 75.1 per cent) due to the impact of Middle East unrest and the Japanese earthquake.
Etihad’s cargo revenues grew by 44 per cent year on year on a capacity growth of 22 per cent for the quarter, with March representing Etihad Crystal Cargo’s best month ever in terms of revenues, number of shipments and tonnage carried.
James Hogan, Etihad Airways’ Chief Executive Officer, said: “I am pleased to report more positive progress on our journey towards break-even and profitability. Our revenues continue to grow faster than our passenger numbers and, thanks to our robust cost controls, we are seeing a real benefit in our overall performance. This marks the first time we have delivered positive EBITDAR in Q1.
“These results were achieved despite significant challenges in our operating environment. This quarter saw unrest in a number of Middle East countries, which has clearly resulted in lower traffic into those markets. The earthquake in Japan in early March has also had an impact. Our ability to respond to these situations is a reflection of the growing maturity and underlying strength of the business.”
Mr Hogan said particular highlights during the quarter included:
- Continued expansion of the network, with new Seoul and Bangalore routes performing well. In addition, Etihad has announced a new daily Abu Dhabi-Male service starting later this year.
- The announcement of increased frequencies to major markets during 2011, supported by the delivery of five new wide-body passenger aircraft – three A330-300s and two B777-300ERs – during summer 2011.
- The impact of Etihad’s comprehensive partnership with Virgin Blue, with the launch of V Australia’s Sydney-Abu Dhabi services in March an important step forward in the relationship. The partnership will see the airlines offer a total of 27 weekly services between Abu Dhabi and Australia, as well as wide-ranging codesharing and reciprocal frequent flyer programs.
- The deployment of leading edge Origin and Destination Revenue Management technology, allowing the airline to maximise revenue through improved inventory availability decisions.
- The launch of ‘Essential Abu Dhabi’, a destination marketing campaign supported strongly by hotels and attractions, designed to enhance the Emirate’s place as a top tourist and MICE destination.
- Activation of programs to support Etihad guests affected by unrest in Egypt and other Middle East markets, and by the earthquake in Japan.
- New freighter services including Johannesburg, Amsterdam and Kabul, as well as frequency expansion of cargo services to Nairobi and Erbil, thanks to growing demand.
- Robust demand for cargo services in Europe and America, reflecting healthier macro-economic conditions in these geographies.
- Strengthening of the airline’s senior management team, with the appointment of Kevin Knight, formerly with United Airlines, as Chief Strategy and Planning Officer and of Juliana Kfouri – formerly with TAM – as Vice President, Corporate Strategy and Special Projects.
Mr Hogan said the airline remained cautiously positive about the future: “Subject to the state of the overall global economy, we believe we are well positioned to continue our journey to profitability.
“Fuel prices will be a major challenge for the airline industry this year but I am glad to report that Etihad has hedged more than 75 per cent of its fuel requirements for 2011.
“We look forward to continued development, delivering our mandate of offering the world’s best products and services, profitably, as we support the growth of our home, Abu Dhabi.”