Etihad’s 2012 Net Profit Triples To $42m

Etihad Airways today reported net profit of $42 million in 2012, up from $14 million in 2011.

Revenues rose 17 per cent to $4.8 billion while passenger numbers increased 23 per cent to 10.3 million.

The airline said these numbers were “boosted significantly” by its codeshares and equity partnerships in airberlin, Air Seychelles, Virgin Australia and Aer Lingus, which delivered more than $600 million in total revenue and more than 1.2 million passengers onto its network.

James Hogan, President and CEO of Etihad Airways, said it was a game-changing year for the Abu Dhabi carrier and the second consecutive year it has been in the black.

Earnings before interest and tax (EBITA) rose 24 per cent to $170 million, while EBITDAR rose to $753 million, a margin of 16 per cent on total revenue.

More than 50 institutions have now provided more than $6.8 billion in cumulative funding for the airline’s ongoing expansion, leading Hogan to say bankers understand its “potential”.

During the year, growth in revenue passenger kilometres (RPKs) were up 23 per cent to 48 billion, while available seat kilometres (ASK) rose 20 per cent to 61 billion, resulting in seat factor increases of 2.4 points to 78.2 per cent.

Cargo tonnage grew 19 per cent on the back of a capacity increase of 14 per cent in available tonnage kilometres.

More than 300,000 passengers flew on Etihad’s and airberlin’s joint network in the first full year of the partnership and numbers were bolstered by new routes to Tripoli, Shanghai, Nairobi, Lagos, Ahmedabad and Basra.

The airline hedged 80 per cent of fuel costs during the year, the same level as in 2011.

Next month sees the launch of the SabreSonic integrated platform, part of a 10-year $1 billion investment with Sabre Airline Solutions.

Planned fleet upgrades for 2013 will see 11 passenger aircraft and three freighter deliveries.

Of the passenger aircraft to arrive this year, five will be narrowbodies (4xA320s, 1xA321) which will be deployed to provide “considerable” frequency improvements regionally, such as on routes to KSA and Egypt. “As the Middle East is a mature market it’s about improving frequency and connectivity through Abu Dhabi,” said Hogan.

Hogan pledged support to Boeing’s beleaguered Dreamliner programme, saying the B787 is a “great aircraft”.

“We have no doubt that this issue will be resolved and Boeing will find a resolution,” he said. Etihad has 41 B787-9s on order.

Challenges in the eurozone are putting pressure on average fares but Etihad continues to see strong growth out of south-east Asia, America and Australasia, despite fuel accounting for 38 per cent of costs, added Hogan.

He declined to talk about the much-publicised proposed alliance with Jet Airways, saying the next stage will be to present its findings to the board “and we’ll take it from there”.

Hogan said Etihad will be lobbying for more flights into China and loosen some of the bilateral constraints – and one solution will be to explore services through equity partners (eg Air Seychelles is starting new flights to Hong Kong).

James Rigney, Etihad’s Chief Financial Officer, said it had recouped the $105 million it paid for a 29.21% stake in air berlin, in seven months, through revenues and cost savings.