- One-off impairments on aircraft and equity investments contribute to US$1.87 billion net loss
- Passenger revenues steady on record passenger numbers and 79% load factors
- 11% reduction in unit costs helps to offset pressure on yields
- Group-wide strategic review well underway to drive change and improve performance
Abu Dhabi, UNITED ARAB
EMIRATES – Etihad Airways today announced its 2016
financial results, recording a net loss of US$ 1.87 billion on US$ 8.36 billion
in revenues as one-off impairment charges and fuel hedging losses weighed
against a solid performance of the core airline.
The core airline business
achieved steady passenger revenues of US$ 4.9 billion and 79% load factors
while carrying a record 18.5 million passengers. Available seat kilometres (ASKs)
increased by 9% to 113.9 billion. Yields fell 8% amid market
capacity pressures and the tough global economic climate, but this was
partially offset by an 11% reduction in unit costs.
Total impairments of US$
1.9 billion included a US$ 1.06 billion charge on aircraft, reflecting lower
market values and the early phase out of certain aircraft types. There was also
a US$ 808 million charge on certain assets and financial exposures to equity
partners, mainly related to Alitalia and airberlin.
Legacy fuel hedging contracts also had a negative bearing on performance in 2016, though this exposure is expected to have less of a financial impact during 2017.
A slowdown in the cargo
market put increased pressure on cargo revenues and yields, and the airline saw
a slight improvement in freight carried at 595,519 tonnes for the 12-month
period.
H.E. Mohamed Mubarak Fadhel
Al Mazrouei, Chairman of the Board of the Etihad Aviation Group, said: “A
culmination of factors contributed to the disappointing results for 2016. The
Board and executive team have been working since last year to address the
issues and challenges through a comprehensive strategic review aimed at driving
improved performance across the group, which includes a full review of our
airline equity partnership strategy.
“The record passenger
numbers in 2016 affirm Etihad’s role as a significant economic enabler for Abu
Dhabi, and our airline business continues to support Abu Dhabi’s vision to
develop tourism, grow commerce and strengthen links to key regional and
international markets.”
Ray Gammell, Interim Group Chief Executive Officer,
explained: “We are focused on maintaining the solid performance of our core
airline business – operationally and financially – even amid difficult market
headwinds. At the same time, we continue to implement changes across the group
as part of the comprehensive strategic review, with a focus on improving
revenues and reducing costs.
“During 2016, the airline commenced a Right Size &
Shape programme that generated total overhead savings of 4% through headcount
reductions and other measures by the end of the year, even as capacity and
total passenger number increased.
“This year is just as challenging for the global aviation
industry and the ever-evolving competitive environment is likely to impact
overall performance in 2017. However, our airline business remains strong and
class-leading, and as an aviation group, we are in a stronger position.”
Peter Baumgartner, Chief
Executive Officer of Etihad Airways, added: “We are in an industry
characterised by overcapacity, declining market sizes on key routes, and
changing customer behaviour as a weak global economy affects spending appetite.
“Our answer to these challenges
is innovation and reinvention, and this gives Etihad Airways a competitive edge
as we seek to leverage opportunities offered to us by a changing environment.
“Operationally, we performed well
in 2016. We maintained load factor levels even as we increased capacity. Yields
were under pressure in all cabins, with Business Class impacted particularly as
corporate travel policies continued to encourage flyers to downgrade to
Economy.
“Our fuel hedging positions, which helped
manage fuel spend during the oil price boom, yet significantly impacted our cost base last year, will taper during 2017. We are also
seeing promising improvements in the contribution made by our ancillary revenue
strategies, and we expect those to offset some of the yield declines.”
2016 PERFORMANCE INDICATORS OF ETIHAD
AIRWAYS:
Key Indicators
|
2016
|
2015
|
Passenger Revenue (US$ billion)
|
4.9
|
4.9
|
Cargo Revenue (US$ billion)
|
0.9
|
1.0
|
Total Revenue (US$ billion)
|
8.36
|
9.0
|
Net (loss)/profit (US$ million)
|
(1,873)
|
103
|
Total passengers (million)
|
18.5
|
17.6
|
Revenue passenger kilometres
(billion)
|
89.5
|
83.2
|
Available seat kilometres (billion)
|
113.9
|
104.8
|
Seat factor
|
78.6%
|
79.4%
|
Number of aircraft
|
119
|
121
|
Cargo tonnage (tonnes ‘000)
|
596
|
591
|
About Etihad Aviation Group
Etihad Aviation
Group (EAG) is a diversified global aviation and travel group comprising five
business divisions – Etihad Airways, the national airline of the United Arab
Emirates, Etihad Airways Engineering, Etihad Airport Services, Hala Group and
Airline Equity Partners. The group has minority investments in six airlines:
airberlin, Air Serbia, Air Seychelles, Alitalia, Jet Airways and Virgin
Australia.
From its Abu Dhabi
base, Etihad Airways flies to, or has announced plans to serve, more than 110
passenger and cargo destinations in the Middle East, Africa, Europe, Asia,
Australia and the Americas. The airline has a fleet of over 120 Airbus and
Boeing aircraft. In 2013, it placed firm orders for 204 aircraft, which
included 71 Boeing 787s, 25 Boeing 777Xs, 62 Airbus A350s and 10 Airbus A380s.
For more information, please visit: etihad.com
For further details:
Duty Media Officer
Etihad Airways
Tel: +97150 8189596
Email: dutymediaofficer@etihad.ae
Agencies
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