Etihad Airways is “cautiously optimistic” about the travel outlook for 2022 despite strong passenger demand and steady cargo rates as the aviation industry recovers from the coronavirus-induced slowdown.
The Abu Dhabi-based airline's earnings before interest, taxes, depreciation, and amortisation stood at $272 million in the first quarter, with yields on passenger fares “reasonably good”, Tony Douglas, chief executive of Etihad Aviation Group, said at the Arabian Travel Market fair in Dubai on Tuesday.
Premium cabin load factors are currently higher than they were before the pandemic, he said. The load factor is a measure of how well an airline is filling available seats.
“We are very cautiously optimistic because all the cargo rates maintain themselves,” Mr Douglas said. “There is a lot of demand out there, which is the second reason I am cautiously optimistic as we go through the year. It is a big part of the recovery that we all need.”
With Covid-related travel restrictions easing worldwide, pent-up air travel demand is finally being unleashed, according to the International Air Transport Association (Iata).
Total traffic in March 2022 — measured in revenue passenger kilometres, or RPKs — was up 76 per cent, compared with March 2021, Iata said in its monthly report.
Although that was lower than the 115.9 per cent rise in annual demand in February, “volumes in March were the closest to 2019 pre-pandemic levels, at 41 per cent below”, it said.
“We are not getting carried away; quite the opposite,” Mr Douglas said.
“It is a sustainable work in progress but what we have seen is the market has come back like a fire hydrant. Yields are still reasonably good … we have been, for the first four months of the year, almost back to 2019 levels.”
Etihad's premium cabin load factors have now exceeded pre-pandemic levels, he said.
“People are quite keen to trade up to more space,” said Mr Douglas. “We have seen a significant upturn in premium.”
About 45 per cent of Etihad's Business and First class cabins were filled with leisure travellers before the pandemic but that percentage has now increased.
Etihad's joint venture with Sharjah-based budget airline Air Arabia Abu Dhabi has been profitable in its first year of operation, he said. It competes with Hungarian Wizz Air's joint venture with local holding company ADQ.
There is room for a third and fourth airline to be based out of the UAE capital, as markets such as Africa are still underserved and represent an opportunity to expand further, Mr Douglas said.