Etihad Airways expects a 'tidal wave of demand' as first-half losses halve to $400 million

August 11, 2021: -Abu Dhabi’s Etihad Airways is forecasting a “tidal wave of demand” following its operating loss to $400 million this year and cutting costs by nearly 30%.

Etihad said the results reflect a “progressive recovery” across the business after the airline provided an $800 million loss in the same period a year before as the pandemic pummeled global aviation and global economies went into lockdown.

On Tuesday, “Every day, Etihad Airways is making up for lost ground,” Tony Douglas, group chief executive officer, said.

“Despite the curveball of the Delta variant disrupting the global recovery in air travel, we kept ramping up operations and are today in a much better place than this time in 2020,” he added.

Etihad, wholly owned by the government of Abu Dhabi, said passenger revenue slumped to around $333 million, decreased by 68% year-on-year from $1 billion. The airline is now blaming “new variants of the coronavirus affecting key travel markets in the Indian Sub-Continent and Europe.”

The passenger revenue collapse was offset by its cargo operations, which saw a 56% increase in revenue to $800 million years after year. 

“While market demand has been slower to recover than anticipated, our record cargo performance has continued to buoy the business,” the Etihad Airways chief financial officer, Adam Boukadida, said.

“While the pandemic still poses challenges, Etihad is on the path to becoming a sustainable and profitable business,” the officer added.

Etihad added that it cut operational costs in the first half of 2021 by 27% each year from $1.9 billion to $1.4 billion, with the support of reduced capacity and volume-related expenses. The airline said cuts to its fixed overhead and financing costs are helping to rebuild its liquidity position to pre-pandemic levels.

“As soon as destinations are added to the Abu Dhabi green list or UAE travel corridors, we are seeing a three to six-fold jump in bookings in some cases, showing there is a tidal wave of demand waiting to be unleashed,” Douglas said.

The airline carried one million passengers in the first half of the year, down from 3.5 million in 2020. Etihad said it was operating almost 3,500 flights a month to 67 passenger and cargo destinations at the end of June.