Etihad Airways Reports 2020 Operating Loss of $1.7 Billion on 52 Percent Revenue Decline to $2.7 B
Etihad Airways has reported a 2020 EBITDA loss of $650 million and a core operating loss of $1.7 billion on a year-over-year total revenue decline of 52 percent to $2.7 billion. Passenger revenues declined 74 percent versus 2019 to $1.2 billion.
On Thursday (March 4, 2021), Etihad Airways announced their 2020 financial results with a core operating loss of $1.7 billion on a year-over-year revenue decline of 52 percent to $2.7 billion. Passenger revenues declined 74 percent versus 2019 to $1.2 billion, while cargo revenue increased 66 percent to $1.2 billion, with a 77 percent yield improvement. The cargo results are largely attributable to limited global capacity, combined with increased demand for shipments of PPE, pharmaceuticals and medical supplies. During 2020, Etihad’s network capacity was reduced by 64 percent to 37.5 billion available seat kilometers (ASKs) and operating costs decreased 39 percent year-over-year to $3.3 billion.
In Thursday’s announcement, Etihad Airways Group’s Chief Executive Officer, Tony Douglas, said,
“Covid shook the very foundation of the aviation industry, but thanks to our dedicated people and the support of our shareholder, Etihad stood firm and is ready to play a key role as the world returns to flying. While nobody could have predicted how 2020 would unfold, our focus on optimizing core business fundamentals over the past three years put Etihad in good stead to respond decisively to the global crisis. We have taken bold action to protect our people and our guests, develop an industry-leading health and hygiene programme, and restructure our business to better position us for recovery. As the world’s first airline to vaccinate all our operating pilots and cabin crew against Covid, we are ready to welcome back travellers to experience best-in-class travel with Etihad Airways.
“While dealing with the reality of the pandemic, Etihad has continued to lead the field in the development of more sustainable flying. Despite the present challenges, we cannot ignore the elephant in the room. The future of flying has to be sustainable for our planet and we need to take responsible climate action today to meet our obligations for the future.”
Also commenting on the Group’s 2020 financial results, Etihad’s Chief Financial Officer, Adam Boukadida, added,
“We started the year on a firm footing by surpassing our transformation targets for Q1 and were looking forward to a strong performance for the year ahead – and then the pandemic took hold. As passenger revenues nosedived, we took immediate action to secure Etihad’s long-term financial health, with a wide range of measures to mitigate the impact of Covid on our business. Despite significant pressures on our cashflow, we maintained liquidity by focusing on cost control, maximizing cargo revenue, enhancing our charter capabilities and raising innovative credit facilities such as the world’s-first sustainability-linked transition sukuk. This was supported by Etihad retaining an A with a ‘stable outlook’ credit rating by Fitch, making it one of a handful of airlines to maintain a pre-Covid rating.”
Prior to the onset of the global COVID-19 pandemic, Etihad Airways was performing ahead of transformation targets set in 2017. By the end of 2019, the carrier had registered a 55 percent improvement in core results, which continued into the start of 2020, with a first quarter year-over-year improvement of 34 percent. Etihad remains on target to achieve a complete transformation by 2023, despite the obvious challenges, and plans on emerging from the crisis as a leaner and more agile business.
During 2020, Etihad took delivery of an additional two Boeing 787 Dreamliners, bringing their fleet to 103 aircraft with an average age of only 6.2 years. The efficient Boeing 787 Dreamliner is the backbone of the Etihad global fleet and the airline is one of the world’s largest operators of the type with 39 aircraft. Etihad’s 2020 operations focused on B787-9/10 flying due to the aircraft’s capability in range and belly-hold cargo capacity, while part of the remaining fleet was grounded due to reduced passenger demand.
At the end of 2020, Etihad offered 50 passenger and seven cargo destinations from Abu Dhabi, approximately 35 percent of their pre-pandemic capacity. In June 2020, Air Arabia Abu Dhabi, a joint venture between Etihad Airways and Air Arabia launched operations as the first Abu-Dhabi based LCC. The new carrier closed the year serving eight destinations, enhancing Abu Dhabi connectivity with a diversified travel offering that complements Etihad’s global network. Additionally, following the historic normalization of relations between Israel and the UAE, Etihad announced year-round service between Tel Aviv and Abu Dhabi, which will commence in March 2021.
Source: Etihad Airways