UAE’s national airline, Etihad Airways said that its first-quarter results showed a rise of 34% year-on-year and the airline “progressed well ahead of its transformation plan goals,” before COVID-19 brought global air travel to a grinding halt.
Tony Douglas Chief Executive, Etihad Aviation Group
“We started 2020 strong and recorded encouraging results as part of our continuing transformation programme. This left us in a relatively robust position when COVID-19 hit, allowing us to act with agility and to mobilise all available resources as the crisis deepened, taking major steps to reduce costs through a wide-reaching series of measures.”
The Abu Dhabi-based airline had its best monthly performance to date in February this year before the implications of the pandemic that had brought about subsequent closure of international borders and the suspension of flights to and from the UAE since March 24. The state-owned carrier was also forced to ground its fleet and slash workers’ wages.
The carrier said in May that it had to cut jobs in many areas of its business, joining its global peers in taking aggressive steps to trim costs to survive the coronavirus crisis. The Etihad Aviation Group, which at the end of 2019 employed 20,369 employees, has not clarified as to how many people were made redundant or in which departments.
In the first half of the year, the carrier flew 3.5 million passengers down 58% from the same time frame in 2019.
During the first six months of this fiscal year, Etihad reported a loss of $758 million compared to $586 million in the prior-year period. Revenue in the first half dropped 38% year-on-year to $1.7 billion. It also reduced operating expenses by 27% to $1.9 billion during this period.
According to the carrier, operating and administrative expenses fell 21% to $0.40 billion during the first half led by “management cost control measures and decreased operations.”
Income from cargo rose 37% year-on-year to $0.49 billion, backed by higher demand and a jump in cargo fares.
Although restrictions begin to lift in some countries, leading carriers’ chief executives, trade groups and aviation industry experts have warned that it may take many years for air travel demand to rebound to pre-coronavirus rates.
World demand for airline passengers will not return to pre-crisis rates until the end of 2023 and even then only if successful vaccines and medicines are available, according to Moody’s Investor Service.
In June, Etihad Airways began rebooting passenger flights, with plans to expand their network to 58 routes in July and August. It aims to run approximately 45% of its pre-covid capacity by this month.
Despite the global pandemic, Etihad continued with plans for a new low-cost airline in Abu Dhabi in collaboration with Sharjah-based budget carrier Air Arabia.
