Etihad Airways expects to break even this year due to strong demand despite the Iran war, reversing a forecast in June that it could post an annual loss.
The Abu Dhabi airline is flying with planes 90 per cent full, generating positive cash flow and benefitting from a “booming” air cargo business, chief executive Antonoaldo Neves told The National on Monday at the Arabian Travel Market.
The airline added 15 per cent capacity in July year-on-year, recorded a profit in August and held air fares at the same rate as last year despite an increase in jet fuel prices. "We are breaking even this year. We are not budgeting for a loss this year. We see demand very, very strong," he said.
This comes after Etihad posted record annual profit after tax of Dh2.6 billion ($707.9 million) in 2025, up 47 per cent on 2024.
In June, Mr Neves said the airline was unlikely to make a profit or may break even depending on the second half of the year. The prediction came as the Iran war disrupted regional air travel, leading to longer routes and higher jet fuel prices.
Mr Neves said the airline was only one to two per cent behind its budget for the year, with growth of 15 per cent in Available Seat Kilometres (ASKs), a measure of its total passenger-carrying capacity, compared with the original target of 18 per cent.
Etihad is "doubling the bet" as it continues to buy planes, hire talent and invest in new products, he said. The airline currently operates 320 flights a day, which it plans to increase by 25 per cent by the end of next year to about 400 flights, he added.
Etihad had undergone years of restructuring before it returned to annual net profitability in 2022, ending a streak of losses that began in 2016.
Asked whether the regional crisis would exert pressure on the airline's achievements, Mr Neves said: "This situation was a great test for Etihad ... we passed the test."
He referred to the airline's ongoing investments in people and products, a strong balance sheet and continued cash generation this year. "We have the ability to absorb the crisis. If this was before 2019, we'd be going to cost-cutting mode," he said, referring to the airline's restructuring phase. "The model was tested, and the model response was the right one. We're confident about keeping investing. Things are going to improve and have been improving."
Next wave of growth
The next wave of growth next year will come from markets in China and Africa, with a focus on Latin America in 2028 or 2029, Mr Neves added.
The airline has been adding an average of 20 destinations per year over the last couple of years in a burst of rapid growth, taking it to about 120 destinations currently. The lastest announcement is a flight to Saudi Arabia's Red Sea coast from October 4.
Etihad has a list of 10 priority countries in which it is pursuing airport slots or traffic rights, including to the island nation of Mauritius, South East Asia, Middle East and Europe, he said.
