Etihad Airways Half Year Results, 50% Pre-Covid Capacity Plans for Aug/Sept and New Premium Snood Facemask
14th August 2020 - 1:00pm
Etihad Airways (Etihad), delivers its half-year (to June) 2020 performance, which saw a strong Q1, ahead of its transformation plan targets. This included its best monthly results to date for February, prior to the impact of COVID-19, closure of borders, and suspension of UAE flights from 24 March.
Etihad carried 3.5m pax in H1, a 58% drop compared with H1 2019. Average seat load factor was 71%. Core operating loss was US$ 758m, an increase of US$172m versus H1 ‘19, driven by 38% lower revenues of US$ 1.7bn (H1 ‘19: US$ 2.7bn) partially off-set by 27% lower direct operating costs of US$ 1.9bn (H1 ‘19: US$ 2.7bn), and a 21% reduction in general & admin expenses to US$ 0.40bn (H1 ‘19: US$ 0.50bn), both driven by cost initiatives and reduced operations. Available Seat Kilometres (ASK) reduced by 53% to 23.69 bn (H1 ‘19: 50.35bn).
Cargo revenues were US$ 0.49bn, up US$ 130m (37%) vs H1 ‘19, with 254,345 leg tonnes of cargo carried, driven by an increase in demand and a spike in cargo fares.
The core operating result for Q1 improved by 34%, despite COVID-19, with a 12% reduction in pax, and a 9.5% reduction in ASK. Q1 seat load factor was 74% and yield at US$ 5.92 cents. Unit revenue in Q1 reduced by 3.3% to US$ 4.14 cents (Q1 ‘19: US$ 4.28 cents), offset by cost management, which was reduced by 2.4% to US$ 7.01 cents (Q1 US$ 7.18 cents).
However, Etihad saw a significant decrease in Q2 operating revenues due to COVID-19 flight suspensions, with 70% of its fleet grounded. Q2 saw a 99% drop in pax and a 95% drop in ASK versus Q2 ‘19. Seat load factor was 16%, mainly driven by repatriations and limited transfer services via Abu Dhabi in early June.
Tony Douglas (Group CEO Etihad Aviation Group) said: “Etihad faced a set of enormous and unpredictable challenges in the first six months of the year. We started 2020 strong, and recorded encouraging results... 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”.
“While we have revised our outlook for the rest of 2020 based on current realities, we remain optimistic that as international borders re-open, we will increase our flying and carry more guests securely and with greater peace of mind... Looking forward, we rest assured that the UAE is leading the way in the research for a vaccine against COVID-19. The incredible efforts Abu Dhabi is making to ensure the safety and security of its residents and visitors will soon enable us to welcome the world back to our amazing home”.
Adam Boukadida (CFO Etihad Aviation Group) said: “This year started strong, riding on the positive momentum gained in 2019, and by the end of Q1, the airline was on track to achieve a 2020 EBITDA of US$ 900m (2019: US$ 453m). Etihad managed to maintain a satisfactory level of liquidity despite a major drop in revenues, while continuing to raise new liquidity facilities... This was supported by maintaining an ‘A with a stable outlook’ Fitch rating in April, at the height of the pandemic. Etihad was one of a small number of airlines to maintain its pre-COVID-19 credit rating”.
“A greater emphasis is being placed on a drive towards increased cost optimisation and efficiencies... Our suppliers and partners have also worked closely with us, including the arrangement of payment holidays with lessors and savings discussions with all of our supply chain, so we can re-emerge stronger together”.
Network - Etihad is gradually resuming services across its network, following the easing of restrictions by UAE authorities. Travel is subject to regulations set by UAE authorities and at end destinations. In Aug/Sept, subject to the lifting of restrictions and re-opening of markets, Etihad aims to fly to 61 destinations from Abu Dhabi, c. 50% of its pre-COVID capacity. Subject to government approvals, Etihad’s summer schedule will feature a wider network and increased frequencies from/to/via Abu Dhabi to:
Middle East & Africa: Amman, Bahrain, Beirut, Cairo, Casablanca, Dammam, Jeddah, Kuwait, Muscat, Rabat, Riyadh, Seychelles Europe: Amsterdam, Athens, Barcelona, Belgrade, Brussels, Dublin, Dusseldorf, Frankfurt, Geneva, Istanbul, London Heathrow, Madrid, Manchester, Milan, Moscow, Munich, Paris Charles de Gaulle, Rome, Zurich Asia: Ahmedabad, Baku, Bangkok, Bengaluru, Chennai, Colombo, Delhi, Hyderabad, Islamabad, Jakarta, Karachi, Kochi, Kolkata, Kozhikode, Kuala Lumpur, Lahore, Male, Manila, Mumbai, Seoul, Shanghai, Singapore, Thiruvananthapuram, Tokyo Australasia: Melbourne, Sydney North America: Chicago, New York JFK, Toronto, Washington, D.C.
Etihad Wellness - Etihad launched this health and hygiene programme and specially trained Wellness Ambassadors, a first in the industry, who provide essential travel health information and care online via webchat, at Abu Dhabi International Airport, and in-flight. Etihad Wellness as a key differentiator when purchasing a premium product which can guarantee care, effective health & safety measures and deliver a world-leading service offering. Etihad Wellness initiatives are at every stage of the journey: culinary hygiene, aircraft cabin deep-cleaning, check-in, health screening, boarding, inflight experience and product, crew interaction, arrival and ground transportation.
Etihad also launched a partnership with the healthcare technology company, Medicus AI, for a COVID-19 risk-assessment tool to help make informed decisions about travelling.
Etihad has launched innovative MicrobeBARRIER™ snood style facemask for passengers in First and Business class. The soft reusable snood has been treated with MicrobeBARRIER™, a broad-spectrum antimicrobial treatment proven to reduce the presence of germs in fabrics. With this long-lasting protective layer, the snoods are washable and reusable, making them environmentally friendly. Made out of lightweight, breathable and stretchy jersey fabric, it is comfortable and ideal for travel. Wear the snood around your neck like a scarf and when close to others, pull it up over your mouth and nose to protect you and them.
Workforce - Etihad continues to support its employees, however, the airline has been forced to make redundancies. Temporary company-wide salary sacrifices of 25-50% were also introduced.
Mr. Douglas added: “...with much sadness, we have had to make some extremely difficult decisions to reduce the size of the workforce by several thousand. Those who have departed Etihad have done so with incredible dignity and their contribution has been immeasurable. We are tremendously proud of each member of the Etihad family, every one of whom has gone above and beyond in extremely difficult conditions to keep Etihad’s image held high, while maintaining superior levels of service. 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”.
“We know that markets are certain to rebound and the world will rediscover the wonder of flying once more. When it does, our guests will value the Etihad Wellness proposition more than ever, and we are best positioned to deliver the security, assurance, and best-in-class experience they have come to expect from Etihad as a true full-service airline”, concludes Mr. Douglas.
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