Etihad Airways recorded its first operating profit in the first quarter, putting it on track to achieve its target of breaking even this year and making a profit next year. Revenue surged to US$770 million (Dh2.82 billion) for the quarter, 21.2% higher than the same period last year.
Passenger revenue rose 15% on the back of a 10.6% growth in passenger numbers to 1,854,392. Etihad’s percentage of seats filled fell to 72.7% in the first quarter from 75.1% in the same period last year, due to the impact of Middle East unrest and the Japanese earthquake. The airline’s first-quarter cargo revenue grew by 44% year-on-year. Capacity grew by 22% in the same period on the back of strong Indian and Chinese routes, Etihad said.
The airline said that the positive results came despite a period of heavy instability in the global economy, with shocks coming from the Japanese earthquake and nuclear crisis, unrest in the Middle East and North Africa and severe cold weather in Europe early in the year. Unfortunately the Abu Dhabi flag carrier did not disclose how much it earned in the first quarter but said the performance was helped by reducing its operating costs by nearly 6% and achieving increasing efficiencies through steady expansion.
The first quarter is one of the slimmest business periods for Middle East airlines, so Etihad’s positive results will give the airline momentum as it heads into the busy summer season, in which Gulf residents often travel for holidays to avoid the hot summers at home.
Mr Hogan said the airline was benefiting from growing brand awareness, a maturing route network and the partnerships it has forged with 30 other airlines.
But the real reason for success could be due to a 75% fuel hedge that is in place.