Last updated: 11:06 PM ET, Fri May 29 2015

Now Facing Legal Challenges, Etihad Continues to Break Records in the Marketplace

Airlines & Airports | David Cogswell | May 29, 2015

Now Facing Legal Challenges, Etihad Continues to Break Records in the Marketplace

PHOTO courtesy Etihad Airways

American and European airlines may be able to beat the Gulf carriers in the courts and the legislative halls, but in the international marketplace Etihad, the national carrier for the United Arab Emirates, seems to be virtually unstoppable.

Looking at Eithad’s just-published financial results for 2014, it’s easy to see why other airlines are troubled. The airline continues to post nearly unheard-of rates of success.

Etihad claims to be the fastest growing airline in history. Founded in 2003 by Royal Decree, its owner and single shareholder is the government of Abu Dhabi. The year 2014 was its fourth consecutive year of profitability.

In 2014 the airline’s net profit leaped 52 percent, from $48 million in U.S. dollars in 2013 to $73 million. The airline set new records with its passenger and cargo volume. Its revenue reached $7.6 billion, up from $6 million in 2013.

Etihad carried a total of 14.8 million passengers in 2014, an increase of 22.3 per cent year-on-year. Passenger demand continues to grow faster than Etihad can expand its capacity to accommodate.

In 2014 Etihad launched services to 10 new destinations in eight countries, including Los Angeles, Dallas, San Francisco, Rome, Zurich, Medina, Yerevan, Jaipur, Phuket and Perth. Etihad also increased capacity on 23 existing routes.

Etihad now flies to 110 existing or announced passenger or cargo destinations.

The airline attributes some of its success to its strategy of alliances and equity partnerships. The airline has purchased equity in a number of other airlines, including Alitalia, airberlin, Air Serbia, Aer Lingus, Virgin Australia, Air Seychelles, NIKI and Jet Airways.

Etihad Airways’ fleet consisted of 110 aircraft at the end of 2014 (up 23.6 per cent year-on-year), with an average age of 5.5 years, one of the youngest in the world. The airline now has 116 Airbus and Boeing airplanes with more than 200 more on order.

Upon the release of Etihad’s 2014 results, CEO James Hogan commented on the legal battles the airline is now facing from competing airlines in the U.S. and Europe.

“Although our growth continued strictly to plan in 2014, we are currently faced with unprecedented external challenges,” said Hogan. “Of particular concern has been the rise in aggressive protectionist sentiment in Europe and the U.S., where both Etihad Airways and its partner airlines are being targeted. These attempts to limit competition are detrimental to consumer choice. They threaten to damage the significant progress that our airline has made in offering improved travel connections, product and service standards, and value for money.”

 However, Hogan vows that legal obstruction will not stop the growth of Etihad.

“Despite these hurdles,” said Hogan, “Etihad Airways will continue to grow as planned in 2015, working with our equity and codeshare partners around the world to serve the destinations that our guests want to visit and at the times they want to travel.”



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