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Etihad Airways profits dip

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Etihad Airways reported net loss of US$ 1.87 billion on US$8.36 billion in revenues as one-off impairment charges and fuel hedging losses weighed against a solid performance of the core airline.

The results were reported for financial results of 2016. The airline achieved steady passenger revenues of US$ 4.9 billion and 79% load factors while carrying 18.5 million passengers. Available seat kilometres (ASKs) increased by nine percent to 113.9 billion. Yields fell eight percent amid market capacity pressures and tough global economic climate, but this was partially offset by an 11% reduction in unit costs.

Total impairments of US$ 1.9 billion included a US$ 1.06 billion charge on aircraft, reflecting lower market values and early phase out of certain aircraft types. There was also a US$ 808 million charge on certain assets and financial exposures to equity partners, mainly related to Alitalia and airberlin.

HE Mohamed Mubarak Fadhel Al Mazrouei, chairman of the Board of the Etihad Aviation Group, said: “A culmination of factors contributed to disappointing results for 2016. The Board and executive team have been working since last year to address issues and challenges through a comprehensive strategic review aimed at driving improved performance across the group, which includes a full review of our airline equity partnership strategy.”

Legacy fuel hedging contracts also had a negative bearing on performance in 2016, though this exposure is expected to have less of a financial impact during 2017.