Etihad Airways aims to triple its number of passengers to 30 million and double its fleet to 150 planes by 2030 as it maps out the “next chapter of growth”, aided by its new planned airport terminal in Abu Dhabi, its chief executive said.
The Abu Dhabi-based airline plans to grow by 10 per cent annually in the next seven years in terms of number of passengers carried and available seats per kilometre, Antonoaldo Neves told The National.
The target is part of a 10-year strategy to focus on operating medium and long-haul flights in lucrative markets and shift away from ultra-long-haul routes, he said.
The plan is to connect travellers in China, India, Pakistan, South East Asia and the Gulf region to destinations in Europe and the east coast of the US via its Abu Dhabi hub in a restructuring of its network over the next decade, Mr Neves said.
Increasing flight frequencies to key European cities will also strengthen the network, while point-to-point traffic will further increase demand for visiting Abu Dhabi.
“It's the next chapter of growth,” Mr Neves said during an interview on Wednesday on the sidelines of the Arabian Travel Market in Dubai.
In October 2022, Etihad Aviation Group appointed Mr Neves, the former boss of Portuguese airline TAP, to succeed Tony Douglas as chief executive.
This came after the Abu Dhabi government transferred ownership of the Etihad Aviation Group — the parent of Etihad Airways — to holding company ADQ as part of efforts to transform the emirate into a global aviation hub.
Key priorities
Mr Neves is now focused on expanding the airline in a sustainable way.
Its Abu Dhabi government shareholder “has set the aspirations very high” and it is time to “grow again” after the airline's “downsize” over the last five years during its restructuring programme, he said.
“What we have to aspire to is to be one of the best airlines in the world, and I think we are, but we need to push the bar higher because everyone is pushing it higher and we cannot stop improving,” Mr Neves said.
“We need scale to do that and our customers want scale, they don't want us to have only one flight a day to Paris or Geneva. Size matters here as long as we're profitable.”
The priority is to be a financially sustainable airline and the short-term goal is to fix the network and structure the banks, an industry term for the peak arrival and departure timings at an airline's hub.
The airline targets carrying 30 million passengers by 2030, up from 10 million last year. It expects to ferry 13 million passengers in 2023, an increase of 23 per cent year-on-year, he said.
Etihad Airways also plans to grow its fleet to 150 planes by 2030 from about 70 jets flying currently and 80 aircraft by year-end.
“I don't see why the airline cannot double the fleet size over the next seven years,” Mr Neves said.
“The Gulf region is growing a lot and in developing economies, the number of passengers grows twice as much as GDP on average.”
This year, it will introduce 15 additional planes, a combination of jets returning to service and new deliveries. These include four Airbus A380s, six A320 and A321 narrow bodies, two Boeing 777s that are coming out of storage and three new 787s.
The airline is adding five to seven new destinations this year, including Lisbon, Dusseldorf, Kolkata, Copenhagen, Malaga and Mykonos, taking the total to 70 destinations.
“The network needs to be very well designed, I pay a lot of attention to that,” Mr Neves said.
“You have to fly the right aircraft to the right market at the right time and to perform the right mission.
“If you deploy the asset to the wrong destination, then the capital deployed is just crazy.”
Jet orders
Asked if Etihad Airways was considering a new aircraft order, Mr Neves said the plan to double the fleet will be done “hand-in-hand” with its joint venture partner Air Arabia Abu Dhabi, that currently has eight planes.
“Now we're debating how many planes we're going to have” under each operator, he said.
The executive said he will take a flexible approach to the fleet.
“We're going to have to use the … planes coming from our old orders but we will need more planes and when it's the right time, we're going to get these new orders,” Mr Neves said. “But I'm not in a hurry to do that.”
The emirate's long-anticipated new midfield terminal at Abu Dhabi International Airport will enable the airline's next growth phase, he added.
“The new terminal is going to be amazing,” Mr Neves said. “The infrastructure we're going to get is going to be incredible, not only for the customers, but also for the network.”
Return to profitability
Last year, Etihad Airways swung to an annual profit amid a strong air cargo performance, Mr Neves said, without disclosing figures.
This followed a record first-half profit following a five-year restructuring programme that transformed it into a medium-sized airline as it reduced its fleet, network and workforce.
“We did well. Cargo was extremely profitable,” he said.
Asked if this year will also be profitable, he added: “We are working towards that.”
In the first quarter of 2023, the airline “did well” on the passenger side of the business, carrying about three million people during the first three months of the year, or 1.1 million per month, he said.
Looking at the remainder of the year, Mr Neves said passenger travel demand is “extremely strong” across leisure and business trips, with unexpectedly robust demand from Europe and the US.
“I am very confident this is here to stay,” he said.
Etihad currently has about 10,000 seats a week of unused flying rights between India and Abu Dhabi, putting it in a “good position” to expand into the country, compared to other peers in the region that are seeking more capacity in the Indian market, Mr Neves said.
The carrier is also planning to add more flights to China after the country reopened to international travel. “We have good partnerships with airlines and in cargo, China is important for us,” he said.
The airline is likely to return to its pre-pandemic network and capacity levels by 2025, according to the executive.
In terms of the impact of high inflation and oil prices on travel demand, he said that “you always have to be cautious, ready for change and agile”.
'Alignment' of values
Mr Neves said his vision for the airline's growth is aligned with that of ADQ. His focus is on “great” product and customer service across cabin classes, a strong network and operational efficiency.
“First and foremost, what brought me here is that I have a lot of alignment with the shareholder vision of ADQ,” he said. “It's much easier to deliver what we have to deliver when there's alignment on shared values.
“The starting point for me is that I only believe in airlines that are financially sustainable. I've been working my entire career to drive performance in organisations over the past 15 years in the aviation space.”
The executive, who also has a background in engineering and corporate finance, has started a weekly committee to assess customer satisfaction on “every point of the journey” to drive efficiency.
Etihad will build a competitive advantage through a great product, being the most efficient airline in the industry and attracting “the best team of people” in the region, he said.
“People are going to be dying to fly on us,” Mr Neves said.
