Etihad has reported a core operating loss of US$1.7 billion for 2020 and says it is speeding up transformation plans put into place in 2017 in order to become a “leaner and more agile business”.
During 2020, the airline carried 4.2 million passengers – down from 17.5 million in 2019 - with an average load factor of 52.9 per cent. It reduced capacity by 64 per cent to 37.5 billion ASKs.
As part of its response to Covid, the airline slashed operating costs during the year by 39 per cent, from US$5.4 billion in 2019 to US$3.3 billion in 2020 by reducing capacity and volume-related expenses, as well as focusing on cost-containment initiatives.
Passenger revenues for the year were US$1.2 billion, down by 74 per cent from US$4.8 billion in 2019, in part due to the total suspension of passenger services into and out of the UAE from the end of March until early June 2020.
The group says that it had registered a 55 per cent cumulative improvement in core results by end-of-year 2019 as part of its transformation plans but still reported a loss for 2019 of US$0.8billion continuing a long run of losses. It says it is targeting a complete turnaround by 2023.
Tony Douglas, Etihad’s CEO, said: “While nobody could have predicted how 2020 would unfold, our focus on optimising core business fundamentals over the past three years put Etihad in good stead to respond decisively to the global crisis. 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.”
CFO Adam Boukadida added: “As passenger revenues nosedived, we took immediate action to secure Etihad’s long-term financial health, with a wide range of measures to mitigate the impact of Covid on our business. Despite significant pressures on our cashflow, we maintained liquidity by focusing on cost control, maximising cargo revenue, enhancing our charter capabilities and raising innovative credit facilities such as the world’s-first sustainability-linked transition sukuk [Sharia-compliant bond].”