Etihad record reflects wider recovery

Etihad Airways has reported record revenues of nearly $1 billion for the first three months of the year, with passenger figures up by more than 500,000 on the same period last year.

Last year, Etihad reported revenue of $4 billion, and passed its break-even target when it posted its first net profit of $14 million. Sammy Dallal / The National

Etihad Airways has reported record revenues of nearly US$1 billion (Dh3.67bn) for the first three months of the year, with passenger figures up by more than 500,000 on the same period last year.

The Abu Dhabi flag carrier's first-quarter results were released yesterday, just hours before the International Air Transport Association (IATA) revealed global airline figures for February showed Middle East aviation had "now fully recovered" from the downturn.

James Hogan, the president and chief executive of Etihad, said the airline's record-breaking figures showed it was on course to hit its $5bn annual revenue target this year.

Last year, the carrier reported revenue of $4bn, and passed its break-even target when it posted its first net profit of $14million.

"We met all our revenue targets and budget estimates in [the] first quarter, despite challenging economic conditions," said Mr Hogan.

First-quarter revenues were $989m compared with $770m for the first three months of last year. This was a rise of 28.5 per cent, while the number of seats filled per flight also hit a record high of 76.5 per cent compared with 72.7 per cent for the same period last year.

In total, the airline carried 2.36 million passengers in the first quarter, up from 1.85 million during the same period last year. Cargo revenue was also up to $159m from $142m for the first three months last year.

"Despite the tough economic times, we believe our business model of organic network growth, combined with codeshare partnerships and strategic equity investments, will enable us to continue to prosper and ensure sustainable profitability", said Mr Hogan.

Mr Hogan also announced further expansion of the airline's global network during the next 18 months, with new daily services to South America and Vietnam.

His comments came before the IATA announced global figures for February. These revealed that airlines in the region have bounced back from last year.

"Middle Eastern carriers have posted 23.4 per cent international growth," said the IATA. "That has been distorted by the poor performance in February 2011 owing to the impact of the Arab Spring. Stripping out the distortions, we estimate that the region has now fully recovered."

But the global picture was different, showing only an 8.6 per cent increase in passenger demand. This prompted a gloomy forecast from Tony Tyler, the chief executive and the director general of the IATA.

"The outlook is fragile," he said. "Improvements in business confidence slowed in February.

This will limit the potential for business-class travel growth. Weak economic conditions and rising fuel costs are a double whammy that an industry anticipating a 0.5 per cent margin can ill afford," he said.

"We are ending the first quarter with a considerable amount of uncertainty."

"While the threat of a European financial meltdown seems more remote than it did only a few months ago, the political risks that aviation faces are growing," he said.

Rising fuel prices will be a major challenge. "The rapid increase in the price of oil is already biting hard," said Mr Tyler.

"The UK is increasing the onerous air passenger duty and Europe is adding to the burden with the inclusion of international aviation in its emissions-trading scheme, creating the possibility of a trade war that nobody can afford."