Etihad Airways claims a transformation effort is yielding results, after the Middle Eastern carrier cut full-year losses in its core operation by 22%.
But the loss still amounted to a colossal $1.52 billion, while the airline's revenues reached $6.1 billion having risen by just under 2%. The figures exclude one-off and extraordinary items, says the company.
Despite their size, Etihad Airways' reduced losses amount to a "significant improvement" in the Abu Dhabi-based operator's performance, says chief executive Peter Baumgartner.
He attributes this to the carrier's transformation initiatives, adding that Etihad has achieved the results despite a rise in fuel costs and the financial drag resulting from collapsed Air Berlin and the administration of Alitalia. Etihad had been an equity investor in both companies.
The airline says fuel prices adversely affected costs by $337 million but that it managed to cut unit costs by 7.3% over the year.
Etihad has been exercising "capacity discipline", it says, concentrating on point-to-point traffic. It took delivery of 12 aircraft last year – including two Airbus A380s and nine Boeing 787-9s – but lifted capacity just 1%.
Capacity was moderated partly by replacing 16 older aircraft – including A330 freighters. Etihad only took delivery of its first A330 freighter in 2010.
Its freight division, Etihad Cargo, received another A330 freighter last year but still slashed capacity by 6%. Cargo revenues were down by 0.8% despite the capacity reduction, as load factor and yield improved.
The carrier has yet to disclose whether future fleet orders will be adjusted as part of the reshaping. Etihad has 62 Airbus A350s on order, including 22 of the -1000 variant, plus at least 25 Boeing 777Xs, and a large number of single-aisle types.
Etihad Aviation Group chief Tony Douglas says the company has been "improving the quality" of its revenues and "streamlining" its cost base.
“These are solid first steps in an ongoing journey to transform this business into one that is positioned for financially sustainable growth over the long term," he says, but adds that there is a "crucial" need to maintain momentum.
Chairman Mohamed Mubarak Fadhel Al Mazrouei says the company is "on track" this year, adding that the previous 12 months have been "pivotal" for the operator.