Etihad Airways cut annual operating losses by 22% last year despite facing a series of business headwinds.
The UAE carrier today reported a loss of $1.52 billion against $1.95 billion in 2016.
The $432 million improvement came as the airline faced significant fuel cost increases, equity partners Alitalia and Air Berlin going into administration and initial investment in a comprehensive business transformation.
The airline increased revenues from core operations by 1.9% to $6.1 billion as year-on-year passenger carryings remained almost static at 18.6 million passengers together with the load factor of 78.5%.
However, passenger yields improved as a result of capacity discipline, changes to the network with an increased focus on point-to-point traffic, leveraging of technology, and improving market conditions, according to the Abu Dhabi-based carrier.
A 7.3% reduction in unit costs was achieved, despite the adverse impact of $337 million from higher fuel prices.
The airline reduced administration and general expenses by 14%, or $162 million, over 2016.
Etihad Airways chief executive Peter Baumgartner said: “Our transformation process has delivered tangible results to date, with a significant improvement in performance for 2017.
“Passenger yields for the last quarter were up a very healthy 9% versus the same period a year before.
“On-time performance was at record levels and operationally we continue to drive down costs without compromising on safety or quality across all areas of the business.
“The major driver to becoming a more agile and efficient organisation, resilient in a very competitive landscape, is our continued investment in skilled professionals, technology and digital innovation, which is going to allow us to become smarter, faster and even more responsive to the ever-changing needs of our customers, making Etihad the airline of choice.
“These developments are at the heart of our transformation strategy.”
Etihad Aviation Group chairman Mohamed Mubarak Fadhel Al Mazrouei said: “Our airline continues to be a key driver of Abu Dhabi’s vision to develop its tourism sector, grow commerce and strengthen links to key regional and international markets.
“This was a pivotal year in Etihad’s transformation journey. The board, new executive leadership team and all our employees worked extremely hard to navigate the challenges we faced.
“We made significant progress in driving improved performance and we are on track in 2018.”
Group chief executive Tony Douglas added: “We made good progress in improving the quality of our revenues, streamlining our cost base, improving our cash-flow and strengthening our balance sheet.
“These are solid first steps in an ongoing journey to transform this business into one that is positioned for financially sustainable growth over the long term.
“It is crucial that we maintain this momentum, retaining talent and attracting leading professionals from around the world to work alongside our highly-skilled UAE national workforce.”