Etihad Airways, the national airline of the United Arab Emirates, has now enjoyed four consecutive years of net profitability, and airfreight played a major role in its success. Last year was Etihad’s best showing to date, posting a net profit of US$73 million on total revenues of $76 billion, up 52.1 percent and 26.7 percent, respectively, over the previous year.
Etihad’s cargo division also had an excellent 2014, becoming a billion-dollar operation one year ahead of its goal. Cargo revenues were up 19.2 per cent to $1.1 billion, with freight and mail volumes rising from 487,000 to 569,000 tonnes.
CEO James Hogan said Etihad Cargo “consistently outperformed” the global market, with 17 percent growth in freight tonne kilometers in 2014 – four times the industry average. He also forecast significant growth for 2015 by continuing to expand the carrier’s capacity and scope.
Overall earnings before interest and tax (EBIT) were up 32.5 percent to $257 million in 2014. Earnings before interest, tax, depreciation, amortization and rentals (EBITDAR) were up 16.2 percent to $1.1 billion, representing a 15 per cent margin on total revenues.
Etihad’s growth in 2014 can be partially attributed to its partnership strategy, based on wide-ranging codeshares and its minority equity investments in strategically important airlines. This has accelerated network growth, giving Etihad Airways the largest route network of any Middle Eastern carrier, reaching more than 500 destinations.
In 2014 Etihad was busy with purchases, solidifying 49 percent ownership of Air Serbia and New Alitalia, the latest additions to its partner network. Etihad Airways also owns minority stakes in airberlin, Air Seychelles, Aer Lingus (increased to 4.99 percent in 2014), Jet Airways and Virgin Australia (increased to 22.9 percent in 2014). An investment in Swiss-based Etihad Regional, operated by Darwin Airline, has now been formalized after earning approval from the Swiss government earlier this year.
Etihad Airways also launched new codeshare agreements with Air Europa, jetBlue, Philippine Airlines, GOL, SAS, Hong Kong Airlines and Aerolineas Argentinas, while Etihad Airways’ existing codeshares with South African Airways, Alitalia and Jet Airways were significantly expanded.
“Although our growth continued strictly to plan in 2014, we are currently faced with unprecedented external challenges,” Hogan added. “Of particular concern has been the rise in aggressive protectionist sentiment in Europe and the US, where both Etihad Airways and its partner airlines are being targeted. These attempts to limit competition are detrimental to consumer choice. They threaten to damage the significant progress that our airline has made in offering improved travel connections, product and service standards, and value for money.”