Etihad Airways Reports Record $476 Million Profit For 2024

Etihad Airways has just reported its financial results for 2024, which are the carrier’s best results in history. I imagine this only increases the company’s odds of finally having an IPO, as that has been under consideration for quite some time.

Impressive Etihad financial results for 2024

Etihad Airways has reported its fiscal year 2024 results, and they’re solid across the board. Let’s look at some of the key metrics, comparing the 2024 results to the 2023 results:

• Profit after tax was $476 million, compared to $143 million the year before
• Passenger revenue was $5.67 billion, compared to $4.54 million the year before
• Cargo revenue was $1.13 billion, compared to $934 million the year before
• Available seat kilometers were 92.5 billion, compared to 72.5 billion the year before
• Passengers carried were 18.5 million, compared to 14 million the year before
• Seat load factor was 87%, compared to 86% the year before
• The number of destinations served was 80, compared to 72 the year before
• Total landings was 90,000, compared to 70,000 the year before
• The operating fleet was 97 aircraft, compared to 85 the year before

What I perhaps find most interesting is that Etihad not only saw a reduction in the cost per air seat kilometer, but also saw a $272 million reduction in net finance costs, “reflecting continuous balance sheet deleveraging supported by strong cash generation.” If I’m interpreting this correctly, that accounts for over half of the company’s profits for the past year.

Keep in mind that most global airlines have seen significant increases in labor costs, but of course in the Middle East there are no unions, so companies have a lot more control over how much they pay employees. I also can’t help but wonder about the details of the reduction in net financing costs, and to what extent that was a strategic decision by the government, ahead of an IPO.

Here’s how Etihad CEO Antonoaldo Neves describes the 2024 results:

“These results are testament to the dedication of our people who have worked together for a purpose, delivering our strategy. Their efforts have driven improvements in customer satisfaction measured across all cabin classes and numerous other touchpoints. Equally they have delivered sustainable, profitable growth while maintaining disciplined efficiency and a steadfast commitment to safety.

“Looking ahead, I am confident we will continue to be a financially strong airline delivering extraordinary customer experiences, fulfilling our shareholder’s mandate, and contributing to the long-term prosperity and success of the UAE.”

This is the third year in a row where Etihad has reported a profit, after losing money during the pandemic, and being in a tough position several years prior to that as well. But everything here looks great — the airline managed to expand significantly, without sacrificing yields, load factors, etc.

I do find it sad that Etihad isn’t announcing any sort of bonus for employees to recognize their hard work, given the company’s success. As a point of comparison, Emirates provided a 20-week bonus for employees last year, in celebration of the company’s profitability.

I’m curious how Etihad’s transformation evolves

In the several years leading up to the pandemic, Etihad Airways lost around $6 billion. The airline was essentially lighting money on fire, until a new transformation plan was put in place.

Prior to the pandemic, Etihad engaged in possibly the worst airline investment strategy in history, in order to create the Etihad Airways Partners concept. The Abu Dhabi-based airline invested in airlines like airberlin (which liquidated), Alitalia (which was taken over by the Italian government), Jet Airways (which liquidated), Air Serbia (which Etihad sold its stake in), Virgin Australia (which went through bankruptcy protection), and Air Seychelles (Etihad sold its 40% stake for $1).

Following that failed strategy, Etihad was very focused on controlling costs, and shrinking into profitability. That plan worked really well, initially under former CEO Tony Douglas (who is now heading up Riyadh Air), and now under CEO Antonoaldo Neves.

What’s interesting is that Etihad is once again in growth mode, under its Journey 2030 plan. By 2030, the airline wants to serve 125 destinations, fly 160 aircraft, and carry 33 million passengers annually. Will the airline be able to achieve that level of growth without it impacting yields?

So far, the current management team has undoubtedly done a great job, though only time will tell. The industry is competitive, and only gets more challenging. Competition in the region is heating up, between growth in India (for IndiGo, Air India, etc.), and new entrants in the Middle East (like Riyadh Air).

Bottom line

Etihad Airways has reported a record profit for 2024, of $476 million. Just about all of the carrier’s metrics are looking up, with significant year-over-year growth, all while improving yields and load factors. Etihad is only getting started on its growth journey, so we’ll see to what extent this success can be sustained.

One thing is for sure — the airline is being a lot more strategic about its growth this time around, compared to a decade ago.

What do you make of Etihad’s financial results, and overall growth plan?