Restructuring over the past three years under the management of CEO Tony Douglas had seen the UAE’s national carrier reduce operating losses to $800 million in 2019 and seen earnings before interest, taxes, depreciation, and amortization,(EBITDA) move into the black with a profit of $450 million. But the 2020 plague saw the airline record an operating loss of $1.7billion and and the EBITDA swing to a $650 million loss, writes Alan Peaford.
"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," group chief executive Tony Douglas said as the results were announced..
Douglas said the pandemic had shaken the “very foundation of the aviation industry". But he added, the transformation programme implemented in 2017 to improve Etihad's core business fundamentals had put the company in good stead to respond decisively to the global crisis.
Passenger revenue shrunk 75% to $1.2 billion in 2020 as the number of travellers declined at a similar rate, from 17.5 million to 4.2 million. More than 80% of all passengers carried in 2020 were flown in the first quarter.
Passenger services in and out of the United Arab Emirates were suspended from the end of March until early June. Etihad's capacity as measured in available seat-kilometres was reduced by 64% in 2020. However the airline also grew its fleet to 103 aircraft in 2020 with addition of two Boeing 787s. The Dreamliner was at the core of Etihad flights during Covid operation. Cargo revenues increased two-thirds to $1.2 billion, amid huge demand for medical supplies. Cargo yields grew 77%. But tonnage declined from 635,000t in 2019 to 575,700t.
The number of employees was cut by a third to around 13,600 at the end of December.
Etihad says it has "accelerated its transformation plans and restructured the organisation during the pandemic into a leaner and more agile business". The airline targets a turnaround by 2023, as planned prior to the crisis.
Tony Douglas - Etihad positioned well for recovery despite major losses. Image: WAM
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