Etihad's first quarter revenues up 20 percent as its rise continues

Etihad Airways, the national airline of the UAE, continued its growth in the first quarter of 2013, as revenues grew 19 per cent to $900 million on rising passenger numbers and a surge in revenues from equity partners.

Passenger traffic in the January-to-March quarter grew by 18 per cent, rising from 2.3 million to a record 2.8 million.

The average seat factor was 80.5 per cent, four percentage points higher than the previous year, despite a 12 per cent increase in capacity. The seat factor is above the International Air Transport Association's current global average of 77.1 per cent.

Etihad's cargo revenues grew 17 per cent to $193 million.

"Our Q1 2013 results have again outstripped global trends, with our strongest-ever first quarter results for passenger revenue," said James Hogan, president and chief executive officer of Etihad Airways.

"This performance demonstrates that Etihad's strategy of organic growth, wide-ranging partnerships, and strategic equity investments is delivering for us and our partners," he added.

"Etihad has proven to great effect that its combined policy of growing organically, as well as through inorganic tie-ups, codeshares and equity stakes in other airlines is one that is reaping huge dividend," Saj Ahmad, chief analyst at London-based StrategicAero Research, told .

Revenue from codeshare and equity partners jumped by 34 per cent from $136 million to $182 million in the first three months of the year and represented 20 per cent of total revenue in the quarter, Hogan said.

"As well as increasing top-line revenue, our equity partnerships will improve bottom-line results, through cost savings delivered by operational synergies," he added.

Etihad's equity alliance comprises airberlin, Air Seychelles, Virgin Australia and Aer Lingus. Each airline announced profitable results during the first quarter of 2013, which demonstrates the success of this new alliance model for all member airlines.

Ahmad said that Etihad's management team has the acumen to make these codeshare and investment deals work. "We have seen Air Seychelles and airberlin also post strong earnings and that their turnarounds would not have been forthcoming without Etihad's guiding hand."

In February 2013, Etihad announced a $42 million profit for 2012 with revenues of $4.8 billion and passenger numbers breaking the 10-million mark for the first time.

"Etihad has proven that its profitability last year was not a one-off event," Ahmad said.

He said Etihad has worked tirelessly to reduce its competitive exposure and risk, while at the same time nurturing growth in markets that it probably would not have ventured to if the airline had to go at it alone.

Running counter to industry trends, Etihad Cargo posted new highs in the first quarter. Volumes were up 20 per cent on capacity growth of 19 per cent. This was driven by a strong performance in North-east Asia, combined with good growth from the Indian Sub-continent from mid-February. The new twice-weekly freighter operation from Houston to Abu Dhabi also enhanced the results.

Strong charter cargo results also underpinned the capability and flexibility of freighter operations. ___