Abu Dhabi’s Etihad Airways is still targeting a return to profit in 2023, despite a more than doubling in core operating losses last year, after accelerating its restructuring during the pandemic.
The state carrier, which started a five-year turnaround plan three years ago, said yesterday it had shed 33% of its workforce, reducing it to 13,587.
Etihad, which grounded most of its fleet between March and June, posted a core operating loss of $1.7bn for 2020.
That’s the airline’s fifth consecutive annual loss, though it said it had been ahead of turnaround targets in the first quarter before the pandemic struck global travel.
Analysts expect it will take the industry several years to recover.
Annual operating revenue fell 52% to $2.7bn, Etihad said in a statement.
Passenger traffic plunged 76% to 4.2mn, with over 80% travelling in the first quarter.
The airline’s operations are entirely dependent on international travel.
It does not operate domestic routes that could provide a cushion against border closures.
Abu Dhabi has also imposed tight entry restrictions into the emirate, requiring many visitors to quarantine on arrival.
Aviation has been one of the industries worst hit by the Covid-19 crisis, forcing airlines to lay off staff and seek government bailouts.
Etihad chief executive Tony Douglas thanked its shareholder, the Abu Dhabi government, for the support it had given the airline, without specifying what exactly it had provided.
Etihad started its turnaround drive as losses piled up after a splurge in spending aimed at competing with major Gulf carriers. It has accumulated losses of around $7.3bn since 2016.
Separately, Abu Dhabi state fund Mubadala began taking orders for two-tranche euro-denominated bonds comprising six- and 13-year paper, a document showed yesterday.
Initial guidance was around 85 basis points (bps) over mid-swaps for the six-year notes and between 105 and 110 bps over mid-swaps for the 13-year notes, the document from one of the banks on the deal showed.
The bonds are being issued through Mamoura Diversified Global Holding (MDGH), a wholly-owned subsidiary of Mubadala Investment Company.
MDGH “is considering issuing new bonds” at this time, a spokesman for Mubadala said in a statement to Reuters, adding that Mubadala established its bond programme in 2009 “as part of our commitment to optimise our capital structure through a flexible approach to funding”.
“Any material updates will be announced to the market in due course and in line with regulations,” he said.
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