Etihad Airways: Profitable Year For World’s First Equity Alliance
Etihad Airways recently heralded a successful first year of its equity alliance strategy, after a financial reporting season which saw each of the five airlines within the alliance – airberlin, Air Seychelles, Virgin Australia, Aer Lingus and Etihad Airways – announce profitable performance.
The airlines’ individual and collective results were boosted by a number of measures, including growing codeshare traffic between their networks, successful joint sales and marketing efforts, and a range of increasing business and cost synergies.
“2012 was a year in which the global economy remained very tough and in which airline industry profits as a whole shrank, for the second successive year. “Yet each of the airlines in our equity alliance showed strong financial performance with each reporting a profit,” said James Hogan, Etihad Airways’ president and chief executive officer.
The airlines’ results included:
- Etihad Airways reported a second year of earnings before interest and tax (US$170 million) and net profit (US$42 million), in only its ninth year of operation.
- airberlin, in which it holds a 29.21 per cent equity stake, reported operating profit of 70.2 million euros in 2012, a turnaround of 317.20 million euros on the previous year. The airline’s net income of 7 million euros marked a return to bottom line profitability for the first time since 2007.
- Air Seychelles, in which Etihad holds a 40 percent stake and has been awarded a five-year management contract, reported 2012 net profit of US$1 million, its first profitable year since 2007.
- Virgin Australia, in which Etihad holds a nine percent stake, reported statutory profit after tax of AUD$23 million for the six months to 31 December 2012 (the airline’s financial year is to 30 June).
- Aer Lingus, in which Etihad holds a 2.987 percent stake, reported operating profit up 40.7 percent to 69.1 million euros, with net profit of 40.6 euros.
Etihad Airways’ equity alliance model has seen increasing cooperation with each of its equity investment airlines. a press release said.