Etihad Airways lifted 2013 profits 48 per cent in a year defined by its strategy of adding capacity through equity alliances.
Net profit reached $62 million as sales grew 27 per cent to $6.1 billion. Partnership revenues also rose by 30 per cent to $820m, representing 21 per cent of total passenger revenues.
“Our codeshare partnerships have been an important part of our business performance for the last seven years,” said James Hogan, president and chief executive of Etihad Airways. “But it is our equity investments which are really taking off now, allowing us to build integrated networks and schedules, develop common products and services and most importantly, identify business and cost synergies.”
Etihad’s growth strategy has relied heavily on expanding its route network through “equity alliances,” in which it invests in carriers that help it to expand its global reach in strategically important regions. In 2013, Etihad grew its equity alliance to seven – comprising Air Seychelles, Air Berlin, Virgin Australia, Air Serbia, Ireland’s Aer Lingus, India’s Jet Airways and Etihad Regional — formerly known as Darwin Airline.
The latest addition to this growing family of equity alliances could be Alitalia, the loss-making Italian flag carrier. Etihad said last month that it was conducting due diligence on a possible investment.
“If we decide to invest it must be in the right condition for both parties and we are still working through that,” Mr Hogan told The National in an interview.
Etihad, established in 2003, has gained increased global prominence through its unique approaching to gaining market share together with headline-grabbing plane purchases.
The Arabian Gulf carrier ordered 199 aircraft and 294 engines at the Dubai Airshow, worth some $67bn.
Etihad passenger numbers surged by 12 per cent in 2013 to reach nearly 11.5 million, as 1.8 million passengers were carried via codeshare deals and other equity alliances.
The addition of seven new codeshare deals in 2013, brought the total number of such partnerships to 47.
Etihad’s aggressive growth plans include adding more than 30 routes by 2020.
In 2013, Etihad launched routes to Sana’a in Yemen, Amsterdam, Belgrade in Serbia, Ho Chi Minh City in Vietnam, Sao Paulo and Washington DC.
This year it is planning to fly to Jaipur in India, Los Angeles, Zurich, Yerevan in Armenia, Perth in Australia, Rome, Phuket in Thailand, Dallas in the US and Medina in Saudi Arabia.
Cargo revenues increased 30 per cent in 2013 to $928 million.
Etihad expects to receive 18 new aircraft this year, including its first Boeing 787-9 Dreamliner and Airbus A380, Both are scheduled for delivery in the fourth quarter.
“The global market remains challenging in 2014 but the macroeconomic picture is improving in key economies around the world. We believe our new model, and the investments we have made in product, service and infrastructure, mean that Etihad Airways is positioned strongly for top-line growth and bottom-line delivery,” said Mr Hogan.