Etihad insists transformation plan is intact as deficit deepens
Abu Dhabi’s Etihad Airways said it is targeting a “complete turnaround by 2023” in spite of the ongoing coronavirus crisis, which cost the airline $1.7 billion in core operating losses and a third of its staff in 2020.
The loss compares to an $800 million deficit in 2019 when the airline had been on track to break even after years of struggling to turn a profit.
Etihad Airways said on Thursday that its workforce has been slashed by a third, from 20,369 at the end of 2019, to 13,587 last year.
Prior to the pandemic, Etihad was ahead of transformation targets set in 2017, having registered a 55 percent cumulative improvement in core results by end-of-year 2019. This momentum continued into the start of 2020, with a record first quarter that showed year-on-year improvement of 34 percent.
“We started the year on a firm footing by surpassing our transformation targets for Q1 and were looking forward to a strong performance for the year ahead – and then the pandemic took hold,” said Adam Boukadida, chief financial officer at Etihad.
“As passenger revenues nosedived, we took immediate action to secure Etihad’s long-term financial health, with a wide range of measures to mitigate the impact of Covid on our business.
“Despite significant pressures on our cashflow, we maintained liquidity by focusing on cost control, maximising cargo revenue, enhancing our charter capabilities and raising innovative credit facilities such as the world’s-first sustainability-linked transition sukuk.”
The airline recorded a 76 percent fall in passengers in 2020 as just over 4 million people travelled aboard its aircraft. Load factors fell to 53 percent while passenger revenues dropped 74 percent down to $1.2 billion.
Etihad’s cargo operation recorded a strong performance, with a 66 percent increase in revenue to $1.2 billion in 2020, driven by demand for medical supplies and pharmaceuticals.
Etihad took delivery of two new Boeing 787 Dreamliners in 2020, bringing the total fleet count to 103 aircraft.
Tony Douglas, group CEO, said: “COVID shook the very foundation of the aviation industry, but … Etihad stood firm and is ready to play a key role as the world returns to flying.”
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