Etihad Airways recorded a “core loss”—equivalent to operating loss for its day-to-day airline operations—of $1.5 billion in 2017, narrowed from $1.95 billion in 2016.

The Abu Dhabi-based airline, which does not publish net profit/loss figures, cited the respective collapse and entry into administration of equity partner airlines airberlin and Alitalia, a subsequent restructuring and rising fuel costs for the results.

The loss was made on turnover that inched up 1.9% to $6.1 billion, compared to $5.9 billion last time.

The 2017 figures are purely for airline operations and exclude aspects such as investments, or any extraordinary or one-off items; the 2016 figures have been restated to show a like-for-like comparison.

The brief figures released by the airline are notable for an almost complete lack of growth, for which the loss of passenger feeds from airberlin and Alitalia play a significant role.

The airline carried 18.6 million passengers (2016: 18.5 million); capacity measured in ASKs was 115 billion (2016: 113.9 billion) reflecting a significant drop on previous growth; and load factor dropped marginally to 78.5% (2016: 78.6%). The fleet dropped to 115 aircraft (2016: 119) and cargo dropped to 552,000 tonnes (2016: 596,000 tonnes).

The airline said passenger and cargo yields had improved as a result of capacity discipline, changes to the network with an increased focus on point-to-point traffic and improving market conditions.

It added that an efficiency drive delivered a 7.3% reduction in unit costs, despite an adverse impact of $337 million from higher fuel prices. The airline reduced its administration and general expenses by 14%, or $162 million, over 2016. The past year was notable for initial investment in what the airline described as “a comprehensive business transformation program.” 

Etihad Cargo reduced capacity by 6%; however, revenues declined only marginally, down 0.8%, driven by stronger load factors and yields.

“This was a pivotal year in Etihad’s transformation journey,” Etihad Aviation Group chairman Mohamed Mubarak Fadhel Al Mazrouei said.

“The board, new executive leadership team and all our employees worked extremely hard to navigate the challenges we faced. We made significant progress in driving improved performance and we are on track in 2018.”

The Group’s CEO Tony Douglas, added: “We made good progress in improving the quality of our revenues, streamlining our cost base, improving our cash-flow and strengthening our balance sheet.

“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. It is crucial that we maintain this momentum.”

Over the past year, the airline received 12 new aircraft: two Airbus A380s, nine Boeing 787-9s and an Airbus A330F. These replaced 16 older Airbus A340, A330, A319 and A330F aircraft, which exited operations, reducing average fleet age to six years.

The airline has also announced over the past year that it intends to trim its network and is ceasing services to Dallas/Fort Worth, Entebbe, Jaipur, San Francisco, Tehran and Venice. A new route between Abu Dhabi and Baku, Azerbaijan, was launched in March, while services to Barcelona will start in November.

“Our transformation process has delivered tangible results to date, with a significant improvement in performance for 2017,” CEO Peter Baumgartner said.

“Passenger yields for the last quarter were up a very healthy 9% versus the same period a year before. On-time performance was at record levels and operationally we continue to drive down costs without compromising on safety or quality.”

Alan Dron alandron@adepteditorial.com