Etihad Airways, the national airline of the UAE, expects to make profit at the end of its turnaround plan in 2023, its chief commercial officer said.
“The five-year plan will make Etihad a good, sustainable company. By 2023, we will have very good news,” Robin Kamark said at a media brief on Tuesday. Etihad’s transformation plan is “comprehensive" and "yielding results" he said, adding, "five years is enough, if nothing geo-political happens or macro events that we haven’t foreseen”.
Etihad Airways embarked on a turnaround strategy in 2017 that reduced overhead costs, dropped unprofitable routes, cut jobs and restructured plane orders. The carrier narrowed annual losses last year by 16 per cent to $1.28 billion (Dh4.7bn) after it reduced costs by 5.5 per cent or nearly half a billion dollars amid challenging market conditions and a 31 per cent increase in fuel prices.
Though it discontinued unprofitable routes including Tehran, Dallas/Fort Worth and Ho Chi Minh City to boost growth, the airline carried 17.8 million passengers in 2018. The Abu Dhabi-based airline which has taken delivery of two A350-1000 aircraft, expects three more in the future, Mr Kamark said at a media brief on Tuesday.
“What we anticipated in the plan is a cautious steady growth, not sort of extraordinary growth,” Mr Kamark said, adding geo-political issues and a slowing global economy is a matter of concern.
“We also see that the international business market and the GDP around the world is not growing and it will be a tough economy next year and [the] year after. We’ve put that into plans and so far we are delivering what we have planned in the restructuring.”
As part of its strategic review the airline is going "back to basics" with a disciplined approach to its operations and agile response to market demand, Tony Douglas, Etihad's chief executive told The National earlier this year.
The airline is offering passengers customised services for a fee, dropping unprofitable routes and is re-configuring economy-class on its narrow-body plans to maximise yields as part of the plan to cut costs and boost revenue.
Etihad Airways is also working on re-designing economy class to add newer seats and upgrade the technology for its onboard entertainment system.
Mr Kamark said 2019 is a “very good year” for the airline and details will be released in February when the carrier announces it financial results.
On the new Midfield Terminal, he said it is a fantastic opportunity to present Abu Dhabi and Etihad in a new shape.
“It will enable us to enhance guest experience and it will help us on the efficiency side, on the operational part of it. We are looking forward to it,” he said. The date of opening of the new terminal is yet to be revealed by authorities.