Etihad Airways is a second-largest airline of the UAE. Its head office is in Khalifa City, Abu Dhabi, UAE. Etihad on Thursday announced its 2016 financial results, recording a net loss of $1.87 billion on $8.36 billion in revenues as one-off impairment charges and fuel hedging losses weighed against a solid performance of the core airline.
The core airline business achieved steady passenger revenues of $4.9 billion and 79 per cent load factors while carrying a record 18.5 million passengers. Available seat kilometres (ASKs) increased by 9 per cent to 113.9 billion. Yields fell 8 per cent amid market capacity pressures and the tough global economic climate, but this was partially offset by an 11 per cent reduction in unit costs.
Total impairments of $1.9 billion included a $1.06 billion charge on aircraft, reflecting lower market values and the early phase out of certain aircraft types. There was also an $808 million charge on certain assets and financial exposures to equity partners, mainly related to Alitalia and Air Berlin.
Legacy fuel hedging contracts also had a negative bearing on performance in 2016, though this exposure is expected to have less of a financial impact during 2017.
A slowdown in the cargo market put increased pressure on cargo revenues and yields, and the airline saw a slight improvement in freight carried at 595,519 tonnes for the 12-month period.