Abu Dhabi based Etihad announced their 1H operating results which showed a stark difference from their Q1 to Q2 results due to the onset of the COVID-19 Pandemic leading to countries including the UAE to put in place travel and border restrictions which dampened demand for air travel severely.
The airline suffered a loss of $758 million for 1H of 2020 compared to a loss of $586 million they made in the same period last year. Revenue for the period fell by 38% to $1.7 billion, the airline’s cash outflows helped reduce the size of the loss as direct operating costs fell by 27% to $1.9 billion while general and administrative expense also fell by 21% to $0.40 billion which were results of measures the airline took to reduce their expenditures to conserve much-needed cash during this unprecedented time.
Etihad’s Route Map for July and August
Many countries while seeing a demand for passenger traffic fall saw a rise in demand for cargo traffic for the movement of much-needed goods to combat the virus among other things and the airline saw cargo revenue increase by 37% to $0.49 billion compared to the same period last year. Etihad also complemented their fleet of 6 Boeing 777 freighters with passenger aircraft to carry cargo on their network.
The airline improved their Q1 operating results compared to Q1 2019, but their short-lived success on their transformation program was cut short as the airline saw a significant drop in revenues as 70% of their fleet were grounded with passenger demand dropping by 99%.
The carrier during 1H carried 3.47 million passengers with the majority attributable to Q1 as they only carried 30,000 passengers during Q2.
ETIHAD is the largest airlines by capacity in Abu Dhabi (w/c 02-Mar-2020)
Source: Blue Swan Daily
Tony Douglas, CEO of Etihad stated that they expect to resume 50% of their pre-COVID-19 schedule by September while ensuring a safe passage for travellers.
The airline also indicated that they are financially stable but have implemented many measures to reduce expenditures and control costs by working with their suppliers and partners including payment holidays with their lessors and discussing savings with their supply chain. While some of their other measures involving the reduction in the size of their workforce and temporarily reduce remunerations.