Etihad Airways CEO Tony Douglas said he “remains optimistic” about the coming months despite operating losses in H1 2020 increasing by nearly 30% to $758 million.
The UAE’s national airline posted a record performance in Q1 of 2020 before the outbreak of the pandemic but performance dived in Q2 when international travel restrictions zapped passenger demand and grounded fleets.
The airline had been on track to double its EBITDA in 2020 up to $900 million, Etihad’s chief financial officer said.
But with the suspension of flights in and out of the UAE on 24 March, Etihad’s half-year revenues fell to $1.7 billion, compared to $2.7 billion in H1 2019. The airline carried 58% fewer passengers in H1 2020 compared to the same period last year.
“Etihad faced a set of enormous and unpredictable challenges in the first six months of the year,” said Douglas.
“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.”
Etihad said it is placing a greater emphasis on “increased cost optimisation and efficiencies across the entire business to face the hurdles placed in our way by Covid-19”.
Like most airlines in the market, Etihad has made several thousand redundancies and cut salaries in a bid to save cash.
Etihad managed to maintain a “satisfactory level of liquidity” during the first six months of the year, according to its chief financial officer, Adam Boukadida. He said that Etihad was one of a small number of airlines to maintain its pre-Covid-19 credit rating.
Around 70% of Etihad’s fleet was grounded when flights were suspended. The carrier began using some of its grounded passenger jets for cargo operations, causing its cargo revenues to increase by 37% up to $490 million. Cargo revenues were helped along by a spike in fares during the period. Revenue earned per unit weight went from around $2 per kilogram up to as much as $20 per kilogram in some cases.
Etihad operated up to 40 of its fleet of 97 passenger aircraft in Q2, including Boeing 787 Dreamliners, 777-300ERs, and Airbus A320 family aircraft as belly-hold cargo freighters to complement its cargo fleet of six 777-200F freighters.
Douglas said that Etihad aims to increase flights to half of the airline’s pre-pandemic capacity by September.
He added: “Etihad, like all major airlines, has had no choice but to embrace the ambiguity of the situation it has been thrown into, and with much sadness, we have had to make some extremely difficult decisions to reduce the size of the workforce by several thousand.
“Etihad flew into the Covid-19 era with uncertainty but is re-emerging resilient, if a little battle-scarred, with a renewed focus on its core values. We are retraining our people throughout the organisation to deliver a new product for a new reality, based on the development and delivery of Etihad Wellness well into the foreseeable future.”