Abu Dhabi is taking amazing strides in the regional and global economy, with tens of billions of dollars of investment across many sectors. The vision for 2030 is ambitious - but Abu Dhabi is well along the road towards its goals. We see an important, and successful, role for Etihad Airlines within that.
Etihad's first flight was in November 2003, making us just over six years old. In that time, we have built a fleet of 53 aircraft, reaching 63 destinations and carrying more than 6 million passengers a year, served by more than 8,000 staff of 120 nationalities. No other national airline has grown so quickly, probably because no other national airline has been set such ambitious goals. Etihad is a core element of the Government's long-term vision for Plan Abu Dhabi 2030. We have been given a critical role to play in supporting the development of trade and tourism as the Emirates extends its programme of economic diversification.
And within that diversification, we are expected to be a strong economic entity in our own right - to operate on commercial lines and to deliver a return on that investment. A single air route can be worth millions of dollars in trade and tourism to an economy. Certainly, our studies support that - Etihad's contribution to the Abu Dhabi economy has been independently estimated at more than US$4 billion (Dh14.69bn) this year. That's on top of our direct contribution through our own revenues.
But in another important way, we have been very different. Unlike many of the original flag carriers, which ran for decades - yes, decades - on government handouts, subsidies and support, our shareholder has been very clear about the return on investment that is expected and the commercial basis on which we are to operate. That focus has shaped our past six years - and it is a major part of defining the future of this business.
First, it means we have a culture that is rooted deeply in commercial principles. Every business decision is taken with a view to the long-term contribution it will make to the financial performance of the airline. In practical terms, that means we have to identify and deliver services that really stand out; that really attract and retain customers. We have to do that with a constant eye on our cost base and on value for money.
And finally, it means that on an operating level, we receive no "free kicks": no fuel subsidies; no cut-price landing charges. Everything is expected to run on a commercial basis. Our business today operates against a backdrop of incredible challenges facing the aviation industry. Over the past 18 months, we have experienced the worst recession in air travel history. Last year, the industry lost a combined $9.9bn. In the past decade, it has lost a total of $50bn.
The savage global economic downturn followed a run that includes the fuel price surges in 2007 and 2008, when we saw costs of up to $147 a barrel, and the heavy impact of the H1N1 pandemic last year. Altogether, it has been an incredibly tough few years for the industry. But against that backdrop, the Middle East has been a beacon of positive news. In 2008, passenger traffic in the Middle East grew by 3.6 per cent and last year it grew by 8.5 per cent. That is against global declines of 0.1 and 4.3 per cent, respectively.
And future forecasts look correspondingly strong. Within those positive Middle East figures, Etihad stands out as one of the strongest performers. Why is that the case? I think there are a number of reasons. First is our take on the estate agents old mantra: it is about "location, location, location". The locations where we are based and where we fly to. Abu Dhabi is a prime strategic location for an airline, one that has really come into its own as aircraft technology has developed. The Gulf has become a natural stopping point for flights reaching East and West - and has allowed the development of increasingly effective global hubs.
The great thing about a hub is that the more you grow, the more effective it becomes. We can load an aircraft in London, land in Abu Dhabi and feed passengers on to connecting points in Japan, China, Australia, India and across the Middle East. And the more destinations we add to our network, the more attractive our flights from London - or any of our other destinations - become. Our expansion plans for the next five years will see us adding destinations in every continent, building new routes that support the tourism and commerce goals of Abu Dhabi.
Our new facilities in Terminal 3 at Abu Dhabi International Airport have already offered a major improvement in our hubbing capabilities. The new Midfield Terminal complex now under development will make Abu Dhabi a major global hub, with long-term capacity of 40 million passengers a year. Second, we have been able to reap the benefit of our "late-mover" status. Because we are such a new airline, we have the newest aircraft, the latest planning and operations technology - you should see our operations control centre at our new headquarters, it would put NASA to shame - the best in-flight entertainment systems, state-of-the-art seats and so on.
We have not been burdened with the legacy equipment of our longer-standing competitors. So, where will Etihad be in the future? We have already created one of the pre-eminent brands in air travel, far outstripping our actual size. Our marketing and sponsorships strategy has really boosted awareness of our brand and of Abu Dhabi. That will continue and you will see the brand's profile grow. You will also see continued growth of the business itself. The global issues of the last 18 months did slow our pace of growth, but the airline's performance in the first and second quarter of this year shows the global recovery is well established. In the long run, our growth will accelerate again as we launch new routes and see greater maturity in the existing network.
You will see an increasingly Emirati business. Today our Emiratisation efforts have created a workforce in which nationals make up 12 per cent of the total, including 102 cadet pilots, 30 graduate managers and 30 technical engineers. That focus will continue, and our target for 2015 is a workforce that is 15 per cent Emirati. But our investment in people is certainly not confined to our Emirati colleagues, and we are proud of a training and development programme that is one of the most advanced across the region.
And finally, you will see an airline that delivers a return on its shareholder's investment. We are confident of reaching break-even next year, a remarkable achievement given the comparative youth of the airline, our ambitious expansion to date and the market environment of the past 18 months. And after next year, we expect to deliver increasingly strong returns to the Government of Abu Dhabi. This is an edited version of a speech given yesterday to the Australian Business Group
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