Etihad Airways said its first quarter performance showed a 34 per cent year-on-year improvement and the carrier was "progressing well ahead of its transformation plan targets", before Covid-19 brought global air travel to a grinding halt.
"Etihad faced a set of enormous and unpredictable challenges in the first six months of the year," Tony Douglas, chief executive of Etihad Aviation Group, said in a statement on Thursday.
"We started 2020 strong and recorded encouraging results as part of our continuing transformation programme. This left us in a relatively robust position when Covid-19 hit, allowing us to act with agility and to mobilise all available resources as the crisis deepened, taking major steps to reduce costs through a wide-reaching series of measures."
The Abu Dhabi airline had its best monthly results to date for February, before the impact of Covid-19, the subsequent closure of international borders, and the suspension of flights to and from the UAE from March 24.
The airline carried 3.5 million passengers during the first half of the year, down 58 per cent from the same period in 2019, with a seat load factor of 71 per cent.
Etihad recorded a $758 million (Dh2.78 billion) loss in the first six months of its fiscal year, compared with $586m in the prior-year period. First-half revenue fell 38 per cent year-on-year to $1.7bn.
The state-owned airline grounded its fleet and reduced staff wages after the UAE suspended regular passenger flights in March to curb the spread of the virus.
During the first half, Etihad reduced operating costs by 27 per cent to $1.9bn.
In May, the carrier said it cut jobs in several areas of its business, joining its global peers in taking tough measures to slash costs to survive the coronavirus crisis. The Etihad Aviation Group, which employed 20,369 people at the end of 2019, did not say how many people were made redundant or in which departments.
“While we have revised our outlook for the rest of 2020 based on current realities, we remain optimistic that as international borders re-open, we will increase our flying and carry more guests securely," Mr Douglas said. "By September, we aim to increase our worldwide flights to half our pre-Covid-19 capacity."
Even as restrictions begin to lift in some countries, leading chief executives of carriers, trade bodies and analysts in the aviation industry warned it may take air travel demand several years to recover to pre-coronavirus levels.
According to Moody's Investor Service, global airline passenger demand will not return to pre-crisis levels until the end of 2023, and only then if effective vaccines and medicines are available.
Etihad Airways began re-starting passenger flights in June, with plans to bring its network to 58 routes in July and August. By this month, it aims to operate approximately 45 per cent of its pre-Covid capacity.
Amid the global pandemic, Etihad proceeded with plans for a new low-cost carrier in Abu Dhabi with Sharjah-based budget carrier Air Arabia.
Air Arabia Abu Dhabi, a joint venture between the two UAE airlines, started operations in July with two routes to Alexandria and Sohag in Egypt. Starting August 7, it will add new destinations to Kabul in Afghanistan and Dhaka in Bangladesh out of its base at Abu Dhabi International Airport.
During the first-half, general and administrative expenses dropped 21 per cent to $0.40bn driven by “management cost containment initiatives and reduced operations,” according to the airline.
Cargo revenues rose 37 per cent year-on-year to $0.49bn, on the back of higher demand and a spike in cargo fares.
“Etihad managed to maintain a satisfactory level of liquidity despite a major drop in revenues, while continuing to raise new liquidity facilities supported by local and international financial institutions,” Adam Boukadida, chief financial officer, Etihad Aviation Group, said.
“A greater emphasis is being placed on a drive towards increased cost optimisation and efficiencies across the entire business to face the hurdles placed in our way by Covid-19."
