Etihad Reports Another Massive Loss for 2018
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
The bad news for Etihad Airways never seems to stop. The airline just reported a $1.28 billion loss for 2018. It’s the third consecutive annual loss for the Abu Dhabi-based carrier, even after it made significant cuts to operational costs and aircraft orders.
The airline lost $1.87 billion in 2016 and $1.52 billion in 2017. The loss is lower than in previous years, but revenue also fell, from $6 billion in 2017 to $5.86 billion in 2018. The airline is trying to spin this year as an improvement over previous years, noting that it had a 15% improvement in core operating performance, a 4% increase in passenger yields and a 3% reduction in unit costs.
In 2017, the airline put into place a five-year cost-cutting program in hopes to return to profitability. However, Etihad says it’s been hard to fully execute this plan because of rising jet fuel prices.
Costs were significantly reduced in 2018, with a total of $416 million being cut, and Etihad’s management plans on continuing to make the airline more efficient. It cut nine unprofitable routes, including Abu Dhabi (AUH) to Dallas (DFW), but still took delivery of three Boeing 787-9s, four 787-10s and one 777-200 freighter. Etihad also said it continues to focus on unbundling services and fares — meaning flyers should get ready for more basic economy-style fares.
Tony Douglas, CEO of Etihad Aviation Group, seemed to appeal in a statement to the government that owns the airlline. “As a major enabler of commerce and tourism to and from Abu Dhabi, we are intrinsically linked to the continued success of the emirate,” he said.
The annual financial report comes soon after the airline announced it would effectively be canceling 76 orders for wide-body aircraft, including 57 Airbus A350s and 21 Boeing 777Xs. It’s axed other routes, flight frequencies and employees since it began taking financial solvency more seriously.
A series of poor investments in other struggling airlines hurt Etihad’s profits. These include cash injections into bankrupt Alitalia and ailing Jet Airways, in addition to Air Berlin, which completely shut down in 2017.
There have been murmurings about Etihad joining Star Alliance and ending its partnership with American Airlines, but that has yet to come to fruition. Meanwhile, its competitor and neighbor, Emirates, has been eyeing a takeover of Etihad, something that however Emirates has denied repeatedly.
And for those hoping to use miles on the carrier for its fantastic first-class products, the airline says it “continues to refine” its business and first-class services. Hopefully, that means fewer cuts to its premium services.
Featured image by Alberto Riva/TPG.
Welcome to The Points Guy!
WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION*: $1,650
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
- Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
- Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.