Etihad Airways' H1 2020 performance included the
best monthly results to date for February, prior to the impact of
COVID19, the subsequent closure of international borders, and the
suspension of flights to and from the UAE from 24 March.
Etihad carried 3.5
million passengers in H1, a reduction of
58% from the same period the previous year (H1 2019: 8.2 million). Average seat load
factor was 71%.
Core operating loss for this period increased by
US$ 172 million to US$ 758 million (H1 2019: US$ 586 million),
driven by a 38% drop in revenues, which stood at US$ 1.7 billion
(H1 2019: US$ 2.7bn). This was partially off-set by a 27%
reduction in direct operating costs to US$ 1.9 billion (H1 2019:
US$ 2.7 billion), and a 21% reduction in general and
administrative expenses to US$ 0.40 billion (H1 2019: US$ 0.50),
both driven by management cost containment initiatives and reduced
operations. Available Seat Kilometres (ASK) reduced by 53% to 23.69 billion (H1 2019: 50.35 billion).
revenues were US$ 0.49 billion, an improvement of US$ 130 million
(37%) compared to the same period in 2019, with 254,345 leg tonnes
of cargo carried. This was driven by an increase in demand and a
spike in cargo fares.
The core operating result for
the first three months of the year improved by 34%, despite the
onset of COVID19, with a 12% reduction in passenger numbers, and
a 9.5% reduction in ASK. Q1 seat load factor was 74% (January’s
performance was significantly stronger than the same month in
2019, with a seat load factor of 81.9%), and yield at US$ 5.92
cents. Unit revenue in Q1 reduced by 3.3% to US$ 4.14 cents (Q1
2019: US$ 4.28 cents), offset by continuous focus on driving down
unit costs, which were reduced by 2.4% to US$ 7.01 cents (Q1 US$
However, the airline saw a significant
decrease in Q2 operating revenues following COVID19 flight
suspensions, with 70% of its fleet grounded. This period
registered a 99% drop in passenger numbers and a 95% drop in ASK
compared to Q2 2019. Seat load factor for this period was 16%,
mainly driven by the operation of special (repatriation) flights,
and the resumption of a limited network of transfer services via
Abu Dhabi in early June.
Tony Douglas, Group Chief
Executive Officer, Etihad Aviation Group, said, “Etihad faced a
set of enormous and unpredictable challenges in the first six
months of the year. We started 2020 strong, and recorded
encouraging results as part of our continuing transformation
programme. This left us in a relatively robust position when
COVID19 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.
“While we have revised our outlook for the rest of 2020
based on current realities, we remain optimistic that as
international borders re-open, we will increase our flying and
carry more guests securely and with greater peace of mind,
supported by the Etihad Wellness programme and our new Wellness
Ambassadors. By September, we aim to increase our worldwide
flights to half our pre-COVID19 capacity. Looking forward, we
rest assured that the UAE is leading the way in the research for a
vaccine against COVID19. The incredible efforts Abu Dhabi is
making to ensure the safety and security of its residents and
visitors will soon enable us to welcome the world back to our
amazing home. This commitment was successfully highlighted by the
recent hosting of major UFC events in the capital.”
Etihad operated up to 40 of its fleet of 97 passenger aircraft
in Q2, including Boeing 787 Dreamliners, 777-300ERs, and Airbus
A320 family aircraft as belly-hold cargo freighters to complement
Etihad Cargo’s operational fleet of six 777-200F freighters.
Between 25 March and 15 June, over 640 special passenger flights
were operated to 45 online and offline destinations, using the
passenger cabins of these aircraft to fly foreign nationals out of
the UAE, and to bring UAE nationals back home.
Boukadida, Chief Financial Officer, Etihad Aviation Group, said,
“This year started strong, riding on the positive momentum gained
in 2019, and by the end of the first quarter, the airline was on
track to achieve a 2020 EBITDA of US$ 900 million (2019: US$ 453
million). Etihad managed to maintain a satisfactory level of
liquidity despite a major drop in revenues, while continuing to
raise new liquidity facilities supported by local and
international financial institutions. This was supported by
maintaining an ‘A with a stable outlook’ Fitch rating in April, at
the height of the pandemic. Etihad was one of a small number of
airlines to maintain its pre-COVID19 credit rating.
“A greater emphasis is being placed on a drive towards
increased cost optimisation and efficiencies across the entire
business to face the hurdles placed in our way by COVID19. Our
suppliers and partners have also worked closely with us, including
the arrangement of payment holidays with lessors and savings
discussions with all of our supply chain, so we can re-emerge
Etihad is gradually resuming
services to more destinations across its global network. This
follows the easing of travel restrictions by UAE regulatory
authorities on outbound and inbound travel for citizens and
residents. All travel remains subject to the entry and health
regulations set by the UAE authorities, and those at the end
Throughout August and September,
subject to the lifting of international restrictions and the
re-opening of individual markets, the airline aims to fly to 61
destinations worldwide from its Abu Dhabi hub, operating
approximately 50% of its pre-COVID19 capacity.
Subject to the applicable government approvals, Etihad’s
summer schedule will feature a wider network and increased
frequencies to the following destinations from, to, or via Abu
Middle East & Africa: Amman, Bahrain,
Beirut, Cairo, Casablanca, Dammam, Jeddah, Kuwait, Muscat, Rabat,
Riyadh, Seychelles Europe: Amsterdam, Athens, Barcelona, Belgrade,
Brussels, Dublin, Dusseldorf, Frankfurt, Geneva, Istanbul, London
Heathrow, Madrid, Manchester, Milan, Moscow, Munich, Paris Charles
de Gaulle, Rome, Zurich Asia: Ahmedabad, Baku, Bangkok, Bengaluru,
Chennai, Colombo, Delhi, Hyderabad, Islamabad, Jakarta, Karachi,
Kochi, Kolkata, Kozhikode, Kuala Lumpur, Lahore, Male, Manila,
Mumbai, Seoul, Shanghai, Singapore, Thiruvananthapuram, Tokyo
Australasia: Melbourne, Sydney North America: Chicago, New York
JFK, Toronto, Washington, D.C.
To protect its customers, Etihad launched ‘Etihad Wellness’, a
comprehensive health and hygiene programme, building on the
stringent measures already put in place to deal with COVID19, and
which is now a major component of the airline’s long-term customer
The launch of the programme was championed by the
introduction of specially trained Wellness Ambassadors who provide essential travel health information and
care online via webchat, at Abu Dhabi International Airport, and
in-flight, so guests can fly with greater peace of mind.
The global response to many aspects of the programme,
including the game-changing Wellness Ambassadors and wide-ranging
travel health and hygiene protocols, has been overwhelmingly
positive. The airline is taking the opportunity to develop Etihad
Wellness as a key differentiator for customers when purchasing a
premium product which can guarantee them genuine care and
effective health and safety measures, and deliver a world-leading
service and hospitality offering.
initiatives are being communicated through an easy-to-use online
guide focusing on the high standards of cleanliness, and health
and hygiene being applied at every stage of the customer journey.
This includes culinary hygiene at the airline’s catering
facilities and food testing laboratory, aircraft cabin
deep-cleaning, check-in, health screening, boarding, inflight
experience and product, crew interaction, arrival, and ground
In June, Etihad also launched a
partnership with Austria-based healthcare technology company,
Medicus AI, to launch a COVID19 risk-assessment tool that will
empower guests to make informed decisions about travelling.
Due to the severity of the situation facing the
industry, the airline has been forced to redesign the organisation
around the need to make redundancies from its workforce across
several areas of the business to ensure future continuity.
Temporary company-wide salary sacrifices of 25% to 50% were also
“Etihad, like all
major airlines, has had no choice but to embrace the ambiguity of
the situation it has been thrown into, and with much sadness, we
have had to make some extremely difficult decisions to reduce the
size of the workforce by several thousand. Those who have departed
Etihad have done so with incredible dignity and their contribution
has been immeasurable,” said Mr. Douglas. “We are tremendously proud
of each member of the Etihad family, every one of whom has gone
above and beyond in extremely difficult conditions to keep
Etihad’s image held high, while maintaining superior levels of
service. Etihad flew into the COVID19 era with uncertainty but is
re-emerging resilient, if a little battle-scarred, with a renewed
focus on its core values. We are retraining our people throughout
the organisation to deliver a new product for a new reality, based
on the development and delivery of Etihad Wellness well into the
Etihad and Etihad Cargo operated special humanitarian services to
60 cities around the world, 40 of which are not currently served
by the airline’s passenger or cargo network of flights. These
included Addis Ababa, Antananarivo, Auckland, Bamako, Banjul,
Barbados, Bhubaneswar, Bishkek, Bogota, Bucharest, Buenos Aires,
Conakry, Dushanbe, Erbil, Freetown, Grozny, Harare, Havana, Kabul,
Kiev, Kinshasa, Kish Island, Larnaca, Lima, Lucknow, Makhachkala,
Moroni, N’Djamena, Niamey, Nouakchott, Podgorica, San Jose,
Santiago, Santo Domingo, Sofia, Tirana, Wuhan, Yerevan, and
With most of its passenger aircraft on the ground throughout
April, May and June, Etihad embarked on the biggest aircraft
maintenance programme in its history.
The airline’s MRO division,
Etihad Engineering, performed maintenance work on 97 passenger
aircraft including 29 Airbus A320 and A321s, 10 Airbus A380s, 39
Boeing 787s, and 19 Boeing 777-300ERs.
Work ranged from minor
maintenance tasks, such as seat repairs and updates to inflight
entertainment systems, to bringing forward scheduled engine
changes and modifications on several aircraft, reducing the need
to withdraw them from service when scheduled services resumed. The
extensive programme was additional to the routine maintenance
which is carried out at regular intervals.
In January, in the presence of the EU Commission Etihad
announced a commitment of zero net carbon Emissions by 2050 and
halving of 2019 emissions by 2035.
launch of the Greenliner programme in partnership with Boeing in
November 2019, Etihad in January took delivery of a specially
branded Boeing 787-10 aircraft, wearing a special ‘green’ livery
to highlight its role in sustainability research activities, to
drive innovation and sustainability into the operational space.
celebrate Ireland’s National Day, Etihad deployed the Greenliner
from Abu Dhabi to Dublin. An optimised route profile reduced the
journey time by 40 minutes, cut fuel by 800kgs, and CO2 by three tonnes.
In the same month, when Etihad announced
its sustainability commitments in Brussels, the airline operated a
Boeing 787 EcoFlight from Abu Dhabi to the home of the EU. The
flight had an optimised routing by Eurocontrol; minimum single use
plastics; and other fuel efficiency initiatives including the use
of electric tractors at the Abu Dhabi hub, reducing APU usage, and optimising potable water levels.
“The clear focus
moving forward is on adapting our transformation plan to reflect
new market conditions, but without changing our overall objectives
or sustainability goals and commitments. We anticipate some
continued volatility for a while to come, as the world strives to
put an end to COVID19, and as testing methodologies and protocols
evolve to become the new norm.
“We know that
markets are certain to rebound and the world will rediscover the
wonder of flying once more. When it does, our guests will value
the Etihad Wellness proposition more than ever, and we are best
positioned to deliver the security, assurance, and best-in-class
experience they have come to expect from Etihad as a true
full-service airline,” concluded Mr. Douglas.
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