Etihad on course for 2012 profit

Etihad Airways is on course to make its first profit in 2012, according to a statement from chief executive James Hogan.

The airline – which celebrated only it seventh birthday earlier this month – is on course to report profitable earnings before interest, taxation, depreciation, amortisation and rentals (EBITDAR) for 2010, with break even expected in 2011, Mr Hogan added.

The Etihad chief executive was speaking at a financial road-show event in London, attended by more than 170 representatives of banks and other financial institutions.

At the road-show – which forms part of the airline’s regular interactions with the international financial community - Etihad laid out its business strategy for the future as well as expanding on its commercial performance since it was established.

Mr Hogan explained: “With only a month to go, we are well on track for profitable EBITDAR for 2010, marking an important milestone in the commercial development of the airline.

“Our next goal is full break-even in 2011, leading to sustainable profitability from 2012 onwards.

“All our indicators show that these targets are in our sights.”

Etihad was recently recognised as the World’s Leading Airline for the second consecutive year by the prestigious World Travel Awards.

“The growth of Abu Dhabi as a global destination is playing a critical role in our development,” continued Mr Hogan.

“The government’s investment in tourism infrastructure, in hotels and attractions, and in the business environment is really paying dividends.

“Etihad is an airline with ambitious plans for the future. But all of those plans are grounded in solid commercial foundations.

“Our shareholder expects a return and we will deliver that return.”

Etihad’s financial road-shows are part of the airline’s commercial fund-raising program, largely in support of its aircraft financing.

The majority of the financing for the airline’s fleet is raised on the commercial markets and Etihad regularly updates the financial community on the performance of the business.

Credit Guarantees

The formerly arcane topic of aircraft financing has been in the headlines recently, with the Aviation Alliance yesterday calling on all governments to offer assistance to carriers, regardless of where they are based.

Etihad has come in for criticism from some quarters, with European airlines in particular criticising the carrier for its perceived links to government.

Mr Hogan, however, stated the opposition argued.

He continued: “There has been recent interest in the issue of export credit guarantees but for Etihad, this has always been only a small element of our aircraft financing strategy.

“The large majority of our financing comes from commercial agreements and it is important for international institutions to understand the performance of the business.”