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Etihad Airways

Etihad Airways

Details

Etihad Airways is one of two flag carriers of the United Arab Emirates, alongside Emirates. Its head office is in Khalifa City, Abu Dhabi, near Zayed International Airport. The airline commenced operations in November 2003, and is the second-largest airline in the UAE after Emirates.

The airline operates more than 1,000 flights per week to over 120 passenger and cargo destinations in the Middle East, Africa, Europe, Asia, Australia, and North America, with a fleet of 85 Airbus and Boeing aircraft as of January 2024. Its main base is at Zayed International Airport.

In addition to its main activity of passenger transportation, Etihad also operates Etihad Holidays and Etihad Cargo. The airline established its airline alliance, Etihad Airways Partners, in October 2015. It ceased operations in 2018 after several of its members fell into financial difficulties. Etihad held minority investments in the participating airlines, and previously had a stake in Virgin Australia until its insolvency in April 2020 with no return on investment.

History:

Background

The Emirate of Abu Dhabi was a joint-owner of Gulf Air along with Bahrain, Qatar, and the Sultanate of Oman. Zayed International Airport was one of Gulf Air's bases and hubs from the 1970s until 2005, when the UAE withdrew from the airline. Gulf Air would remain as a two-state carrier until Oman's exit in 2007 in order to focus on Oman Air and today, Gulf Air is solely owned by Bahrain.

Name

Etihad means "union" or "unity" in Arabic, and represents the unity of the seven Emirates of the United Arab Emirates (Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah, and Fujairah).

Foundation

In July 2003, future UAE president Sheikh Khalifa bin Zayed Al Nahyan, who wanted an airline for Abu Dhabi, issued a royal (Amiri) decree that established Etihad Airways as a national airline of the United Arab Emirates. Sheikh Ahmed bin Saif Al Nahyan founded the airline and utilized AED500 million of start-up capital. Services were launched with a ceremonial flight to Al Ain on 5 November 2003. On 12 November 2003, Etihad commenced commercial operations by launching services to Beirut, Lebanon.

In June 2004, the airline placed a US$8 billion aircraft order for 6 Boeing 777-200 and 24 Airbus aircraft, including 10 Airbus A380s. Its first A380 was delivered in December 2014.

In June 2008 at the Farnborough Airshow, the airline announced an order for 35 Boeing 787s and 10 777s, options for 25 787s and 10 777s, and purchase rights on 10 787s and 5 777s.

Etihad reported its first full-year net profit in 2011, of US$14 million, in line with the strategic plan announced by CEO James Hogan in 2006.

Equity Alliance

In December 2011, Etihad announced it had taken a 29.21% stake in Air Berlin, Europe's sixth-largest airline, and Hogan was appointed Vice Chairman. It followed this up with minority stakes in other airlines—Air Seychelles (40%), Aer Lingus (2.987%),[16] Virgin Australia (10%). On 1 August 2013, the president of the company, Hogan, signed a deal with Aleksandar Vučić, First Deputy Prime Minister of Serbia, in Belgrade, giving Etihad a 49% stake in the Serbian national carrier Jat Airways. The Serbian Government retained 51% of the shares, with the company being rebranded as Air Serbia.

In September 2012, the Indian government announced that foreign airlines could take up to 49% stake in Indian carriers. On 24 April 2013, Jet Airways announced that it was ready to sell a 24% stake in the airline to Etihad for US$379 million. The deal was completed on 12 November 2013.

At the 2013 Dubai Airshow, Etihad announced that it was acquiring a 33.3% stake in the Swiss carrier Darwin Airline. Darwin was rebranded as Etihad Regional in March 2014. Etihad sold its stake in Darwin in 2017.

On 1 August 2014, Etihad agreed to take a 49% stake in the Italian flag carrier Alitalia for an estimated €560 million. The deal was closed on 8 August 2014. On 1 January 2015, Alitalia-CAI formally passed its operations to Alitalia-SAI, a new entity owned 49% by Etihad and 51% by the Alitalia-CAI shareholders.

In May 2016, the management structure was reshuffled, as Hogan became CEO of the airline's parent company, Etihad Aviation Group. Peter Baumgartner, formerly the airline's Chief Commercial Officer, became chief executive officer of the airline, reporting to Hogan. In December 2016 Handelsblatt Global reported that Hogan was going to be dismissed after a "failed spree of acquisitions in Europe."

On 24 January 2017, the Etihad Aviation Group Board of Directors announced that Hogan (along with Group CFO James Rigney) would be stepping down "in the second half of 2017". Peter Baumgartner, (former CEO of the airline), became the acting CEO of the airline as it faced mounting losses from its investments in Air Berlin and Alitalia. On 2 May 2017 Alitalia filed for bankruptcy. Hogan and Rigney left Etihad later that month. On 27 July Etihad reported a loss of US$1.873 billion for 2016. On 15 August Air Berlin filed for bankruptcy after Etihad withdrew its financial support.

As an interim measure, the board of directors appointed Ray Gammell as CEO (previously Chief People and Performance Officer) while searching for a permanent replacement. On 9 January 2018, Etihad Airways appointed Mark Powers as Group CFO, replacing interim Group CFO Ricky Thirion.

On 2 July 2017, the United States Department of Homeland Security unbanned Etihad Airways and exempted Etihad Airways from the 2017 electronics ban after the airline enhanced its passenger screening processes.

In June 2018 Etihad reported a net loss of US$1.52 billion for 2017.

In February 2019, Etihad announced large order cancellations for both Airbus and Boeing aircraft. The airline terminated contracts for all 42 Airbus A350-900s, 2 A350-1000s and 19 of 24 ordered Boeing 777X.

On 1 May 2021 it was announced Etihad Airways sold its 40% stake in Air Seychelles back to the Government of Seychelles.

On 13 May 2023 the Serbian Government announced they had finished acquiring 100% equity in Air Serbia, after several years of buying back stakes from Etihad.

Impact of COVID-19

In May 2020, shortly after Air France retired its entire Airbus A380 fleet due to the COVID-19 pandemic, there were rumors that Etihad Airways was considering canceling all its remaining Airbus A350 orders and retiring its entire Airbus A380 fleet due to more financial losses caused by the COVID-19 pandemic. Etihad's CEO Tony Douglas said that Etihad's A380 fleet was very likely not to fly again in passenger service, and therefore likely to be withdrawn after only 7 years in service. This move would make Etihad the third Airbus A380 operator to retire its Airbus A380 fleet, following Air France-KLM and Hi Fly Malta. However, by 26 May 2020, Etihad confirmed that the airline will not cancel its remaining Airbus A350 orders and plans to proceed with them. The airline also confirmed that it had no plans to ditch its Airbus A380 fleet into early retirement, unlike Air France, despite the COVID-19 pandemic.

However, as of October 2020, some sources stated that the Etihad Airbus A380 still had a potential possibility of early retirement due to the aircraft market changes and demand caused by the COVID-19 pandemic as Douglas referred to the Airbus A380 as a heavily inefficient handicapped behemoth by two engines too many. Douglas also said that smaller long-range twin-jet aircraft such as the Boeing 777X, 787, and Airbus A350 can do the job far more efficiently and sustainably than that of the A380.

In February 2021, Etihad Airways vaccinated all its operating pilots and cabin crew against COVID-19, the first airline to vaccinate all its operating pilots and cabin crew.

Since most of Etihad's flights were grounded between March and June 2020, the airline's passenger traffic dropped by 76% to 4.2 million in 2020.

Throughout 2020, due to the COVID-19 pandemic, Etihad Airways laid off over 1,000 cabin crew and pilots.

Etihad had reported significant losses even before the pandemic; since 2016, it lost over $5.62 billion and in 2019 losses amounted to $870 million. The airline's full-year losses amounted to $1.7 billion in 2020,[45] and $476 million in 2021.

Return to profitability

In July 2022, Etihad announced a record-breaking first-half profitability of $296 million. This was achieved due to the increased passenger travel demand. Etihad carried 3 million more passengers in the first half of 2022, compared to the first half of 2021.

In October 2022 Etihad Airways was transferred ownership over to Abu Dhabi sovereign wealth fund ADQ. Etihad, Wizz Air Abu Dhabi, Abu Dhabi Airports, Etihad Holidays and more were all brought into common ownership.

Although the airline had grounded its fleet of 10 A380-800 aircraft with no initial plans to redeploy the aircraft, it was decided that they would return to service. In 2023 Etihad redeployed 4 of their 10 jumbo jets onto their London Heathrow service, with later decisions that an additional A380 would return to the fleet. The airline later announced the redeployment of their A380 to their New York JFK route in April 2024 as well as to Paris Charles de Gaulle from November 2024.

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