Abu Dhabi-based mainline carrier, Etihad, said it has significantly improved operational performance since 2017, when the airline group introduced its transformational plan. However, the improvement did not help the carrier to avoid massive losses once again. 

Etihad ended 2019 with a net loss of $870 million ‒ an improvement of 32% compared to 2018 when it ended the year with a $1.28 billion negative result. The carrier, despite fewer passengers and lesser revenue, still managed to improve their load factor (from 76.4% to 78.7%) and overall yields performance (up by 1%).

In total, Etihad carried 17.5 million passengers on its 76 destination route network and ended the year with 101 aircraft in its fleet. The total revenue earned was $5.6 billion ($5.9 billion in 2018). During the year it added 11 Boeing 787 Dreamliners, while slowly retiring their older Airbus A330 aircraft. The airline managed to negotiate deals with two companies to manage its aircraft assets, including the sales of older A330s and the sale and lease-back of 19 still in service Boeing 777-300(ER) aircraft, which allowed Etihad to improve its short-term financial liquidity.

READ MORE:
 
Etihad is set to phase out its last remaining Airbus A330s by the end of 2021. The national carrier of the United Arab Emirates has been known for its financial struggles in the past few years ‒ a time during which it often resolved to cut its voluminous plane orders and fleet. What is there to be left once the Airbus widebodies leave the fleet? 
 

Etihad attributed the lowering losses to its route optimization, which according to Tony Douglas, Chief Executive Officer of Etihad Aviation Group, also allowed the airline to improve its cost base and gave “headroom to invest in the guest experience, technology and innovation, and our major sustainability initiatives.”

And invest it did: partnered together with Air Arabia, the airline group established Air Arabia Abu Dhabi, a low-cost carrier based in the United Arab Emirates. According to the airline, the decision was made to cater to the “rapidly-growing demand for low-cost travel” in the United Arab Emirates. Air Arabia Abu Dhabi is set to launch in Q2 2020, operating independently, while at the same time complementing Etihad’s network from its hub in Abu Dhabi.

READ MORE:
 
As both Wizz Air and Air Arabia and Etihad announced their low-cost adventures in Abu Dhabi, one question arises: why Abu Dhabi out of all the places?