Business & Economy

Etihad sees 27% y-o-y rise in Q1 revenue, passengers up 14%

12 May, 2014

Etihad Airways has announced its strongest ever passenger and cargo volumes for a first quarter, together with US$1.4 bln in total revenues during the three-month period, marking a year-on-year increase of 27%.

A total of 3.2 mln passengers travelled with Etihad in the first quarter of 2014, over 14% higher than the 2.8 mln from the same period last year. The growth rate is more than double a recent estimate from the International Air Transport Association (IATA) that passenger demand will increase 5.8% this year on a global basis.
Etihad Cargo also outperformed the global market, carrying 127,821 tonnes of freight and mail in the first quarter. This marks a year-on-year increase of 26%, almost seven times higher than IATA’s prediction that the international cargo market will grow by 4% in 2014. The airline’s cargo revenue also increased by 26% to US$243 mln, placing Etihad Cargo on track to become a billion dollar business in 2014.
“Although the global airline industry has faced challenges such as higher-than-expected fuel prices and fierce competition in key international markets during the first quarter of 2014, we have continued to outperform the passenger and cargo markets, and raise the bar even further,” said James Hogan, President and CEO.
“Our strong performance highlights the continued success of Etihad Airways’ strategic master plan, which focuses on the three fundamental pillars of organic network growth, codeshare partnerships and minority equity investments in other airlines around the world which makes it positioned strongly for top-line growth and bottom-line delivery in 2014.”
Etihad’s volumes were boosted by the fast-paced growth of its international route network, with 95 destinations operational by the end of Q1 2014, six more than in the same period in 2013. Network highlights in the first quarter included the start of a daily service to Medina, Etihad Airways’ fourth destination in Saudi Arabia, while frequencies increased on six existing routes, including New York in the US, Munich in Germany, Colombo in Sri Lanka, and Chengdu in China. The airline will commence services to eight more destinations over the remainder of 2014, increasing its global route network to 103 by the end of the year.
Organic growth was supported by the development of codeshare and equity partnerships, which delivered 678,000 passengers onto Etihad flights in the first quarter of 2014, 25% higher than the same period last year. Revenue from codeshare and equity partners rose 23% to US$223 mln, representing 22% of total revenue in the quarter.
During this period, new codeshare agreements were signed with Air Europa and JetBlue, while an existing codeshare with airBaltic was expanded. Etihad also obtained regulatory approval to acquire a 49% share of Air Serbia.
To accommodate the double-digit growth in passenger volumes, Etihad’s fleet expanded to 95 aircraft in the first quarter of 2014, marking an increase of 30% in the fleet size over the same period last year, while the airline’s passenger carrying capacity, measured in Available Seat Kilometres (ASK), increased by 21% year-on-year to 19.2 bln.
A number of factors contributed to the rapid growth of Etihad Cargo’s revenues in the first quarter compared to the same period in 2013, including stellar performances in the India (+32%) and China (+14%) markets, the launch of new routes to Brazil and Vietnam, and heavy demand for charter solutions. Cargo volumes were also strengthened by the launch of a joint freighter service with DHL, serving Pakistan and the GCC markets out of Abu Dhabi.
Etihad Airways operates a two-class Airbus A320 between Abu Dhabi and Cyprus configured to carry 140 passengers, with 16 seats in business class and 120 in economy every Monday, Wednesday and Friday. Etihad recently announced the increase of its base frequency on the Abu Dhabi - Larnaca route from three to five flights per week. It will also operate Larnaca as a daily service during the peak summer period from 1 July to 30 September.