Etihad celebrates record first quarter results

Passenger numbers in Q1 2013 grew by 18 per cent, rising from 2.3 million to a record 2.8 million.

The average seat factor was 80.5 per cent, four percentage points higher than the previous year (2012: 76.5 per cent), despite a 12 per cent increase in capacity. The seat factor is above IATA’s current global average of 77.1 per cent.

Etihad Cargo also had its strongest first quarter, with tonnage up 20 per cent from 85,152 to 101,776 tonnes.

The airline’s president and CEO James Hogan said: “Our Q1 2013 results have again outstripped global trends, with our strongest ever first quarter results for passenger revenue.

“This performance demonstrates that Etihad Airways’ strategy of organic growth, wide-ranging partnerships, and strategic equity investments is delivering for us and our partners,” he said.

Revenue from codeshare and equity partners jumped by 34 per cent from US$136 million to US$182 million in the first three months of the year and represented 20 per cent of total revenue in the quarter.

“As well as increasing top-line revenue, our equity partnerships will improve bottom-line results, through cost savings delivered by operational synergies,” Mr Hogan said.

Etihad Airways’ equity alliance comprises airberlin, Air Seychelles, Virgin Australia, and Aer Lingus. Each airline announced profitable results during the first quarter of 2013, which demonstrates the success of this new alliance model for all the member airlines.

In February 2013, Etihad Airways announced a US$42 million profit for 2012 with revenues of US$4.8 billion and passenger numbers breaking 10 million for the first time.

Etihad Airways’ available seat kilometres (ASKs) rose 12 per cent in Q1 2013 to 15.9 billion, (2012: 14.3 billion) as the fleet grew to 73 passenger and cargo aircraft (2012: 66 aircraft). Revenue passenger kilometres (RPKs) rose 17 per cent to 12.9 billion (2012: 10.9 billion) sharply out performing capacity growth.

Running counter to industry trends, Etihad Cargo posted new highs in the first quarter. Volumes were up 20 per cent (on capacity growth of 19 per cent). This was driven by a strong performance in North East Asia, combined with good growth from the Indian Subcontinent from mid-February.

Analyst Saj Ahmad, commenting on the results said: “If there were ever any doubt that Etihad's dual strategy of organic and inorganic growth was not yielding results, then these first quarter numbers demonstrate otherwise. An 18% rise in passengers, pushing load factors over 80% while delivering a 19% rise in passenger revenue shows to very good effect that Etihad is leveraging not just financial benefits through its stakes in other airlines, but that its continued expansion is indeed drawing in passengers to and through Abu Dhabi in very much the same way that Emirates is doing in Dubai.

“It is equally evident from these results that Etihad's management team have the acumen to make these code share and investment deals work. We have seen Air Seychelles and Air Berlin also post strong earnings and that their turnarounds would not have been forthcoming without Etihad's guiding hand.

“That said, Etihad has proven that its profitability last year was no fluke. This is a business geared to long term financial growth and robustness through its disciplined, risk-mitigating policy of inorganic and organic growth. Given the swathe of partnerships the carrier has, it is hard to argue that their strategy is in any way flawed. It also underlines the intrinsic importance of GCC passenger growth - those that argue that there is some mythical excess of passenger capacity exists, then this is proof to the contrary - Etihad's strong earnings shows that there has been no decline in yields and that bookings, revenue and demand remain very strong in the GCC.”