Etihad posts first quarterly profit

Etihad Airways, Abu Dhabi's flagship carrier, said quarterly revenues rose 28 per cent on the back of increased passenger numbers and the expansion of its global network.

The unlisted airline said first quarter revenues were $989 million, compared with $770 million for the year-ago period, according to a statement on Tuesday.

Etihad Airways carried 2.4 million passengers in the first three months of 2012, it said in a statement.

Average seat factor was 76.5 per cent for the first-quarter and the airline carried 2.36 million passengers during the period.

"We met all our revenue targets and budget estimates in first quarter, despite challenging economic conditions confronting the international community," Chief Executive James Hogan said in the statement.

The airline acquired 30 per cent of Germany's Air Berlin last year and took a 40-per cent stake in Air Seychelles in February.

"Investment in Air Berlin and Air Seychelles are already bearing fruit and we are starting to see both revenue and cost benefits from synergies with each carrier," Hogan said.

Etihad posted its first annual profit in 2011 since it was created nine years ago, notching a small $14 million profit.

Hogan said on Tuesday the airline turned a profit in the first three months of 2012.

 “Despite the tough economic times we believe our business model of organic network growth combined with codeshare partnerships and strategic equity investments will enable us to continue to prosper and ensure sustainable profitability,” Hogan said.

Hogan unveiled plans for a significant expansion of the airline’s global network over the next 18 months.

These included a daily service to Etihad Airways’ first South America destination and a new service to Vietnam.

Hogan said the South American flights would begin mid next year with details of the first destination now being finalised.

“This a logical next step for us and will mark the sixth continent we serve and our coming of age as a truly global airline,” he said.

 Etihad Airways also planned to replicate the success of its European expansion by introducing additional frequencies to a range of other destinations in Asia and Australia.

Hogan said: “We continue to outperform much of the global airline industry, with spectacular growth in revenue, the number of passengers flown and freight carried. 

“Our expanded network through organic growth and partnerships has reached a critical mass that is now powering our business forward. Our seat factor hit a record high but yields, particularly in the premium cabins, remain a challenge.”

Already in the first quarter of 2012 Etihad Airways has announced the launch of non-stop daily flights to Washington, D.C., begun flights to Tripoli, Shanghai and Nairobi, and will soon start services to Basra and Lagos, as well as increase flight frequencies to Düsseldorf, Bangkok, Cairo, Kuwait, and Dammam. Extra capacity will also be added to London Heathrow and Kuala Lumpur. The national airline of the United Arab Emirates now has a worldwide network that stretches across 84 cities in 54 countries.

Etihad Airways will take delivery of seven new aircraft in 2012 – three Airbus A320s and four Boeing B777s, with the first three-class B777-300ER deployed on the London route from July. The carrier’s fleet will have grown to 71 aircraft by year’s end.

The airline said revenue passenger kilometres (RPKs) rose during the first quarter by 26.6 per cent to 10.9 billion, thanks to growth in available seat kilometres (ASKs) through new routes, additional frequencies, increased seat capacity and strengthening load factors.  Seat factor jumped by 3.8 percentage points to 76.5 per cent, the highest first quarter level in the airline’s history.

Hogan highlighted the importance of Etihad’s partnership strategy in boosting passenger numbers in the first three months of the year.

“We are flying with fuller planes across the network and our codeshare partnerships played a major role in this growth, accounting for 18 per cent of our revenues in the quarter.”

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