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.
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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 billion 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?
It will be interesting for them to try to do a IPO. They will need to disclose fuel costs and other metrics. When it becomes obvious they are way below what others declare, they will likely start to face a lot of scrutiny from any authorities interested in state subsidies and level playing field.
A disclosure they carefully avoid until now.
Etihad’s financial results for 2024 are impressive, especially considering its past struggles, but it’s worth comparing them to a truly premium airline like Delta. While Etihad posted a profit of $476 million, Delta reported a net income of $4.6 billion in 2023—nearly ten times higher. Delta’s passenger revenue alone was over $50 billion, dwarfing Etihad’s $5.67 billion.
Beyond scale, Delta’s premium positioning sets it apart. Delta commands higher yields through a robust loyalty program, corporate...
Etihad’s financial results for 2024 are impressive, especially considering its past struggles, but it’s worth comparing them to a truly premium airline like Delta. While Etihad posted a profit of $476 million, Delta reported a net income of $4.6 billion in 2023—nearly ten times higher. Delta’s passenger revenue alone was over $50 billion, dwarfing Etihad’s $5.67 billion.
Beyond scale, Delta’s premium positioning sets it apart. Delta commands higher yields through a robust loyalty program, corporate travel dominance, and premium cabin offerings, whereas Etihad operates in a more cost-sensitive market with less emphasis on high-yielding frequent flyers. Additionally, Delta’s strong labor unions mean higher costs, yet it still maintains profitability, whereas Etihad benefits from the Middle Eastern labor model with lower costs.
While Etihad’s turnaround is commendable, it remains a much smaller and less premium airline compared to Delta. The real test will be whether it can sustain this profitability while aggressively expanding.
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Ben will get to it but keep in mind these people's entire online existence is incapable of following norms.
It will be an ongoing process of whack-a-mole (no offense to real moles)
I just have to wonder, they have so few widebodies coming in, yet they're going to "waste" one on Atlanta of all places? There's gotta be more to it than that. Especially with them forming so many new partnerships, and even joint-ventures (China Eastern) with Skyteam carriers.
I know that Delta likes to pretend that Riyadh Air is some amazing thing, but the reality is, they're no more than marketing fluff at this point. They...
I just have to wonder, they have so few widebodies coming in, yet they're going to "waste" one on Atlanta of all places? There's gotta be more to it than that. Especially with them forming so many new partnerships, and even joint-ventures (China Eastern) with Skyteam carriers.
I know that Delta likes to pretend that Riyadh Air is some amazing thing, but the reality is, they're no more than marketing fluff at this point. They haven't flown a single passenger, won't for likely a year or years, and even once they do, they still won't have any significant network to speak of for years on end after that.
So I really do wonder if Delta and Etihad are working on something, and have just been really tight about leaks. It's the only thing that would seemingly make sense with what they're doing with Atlanta. Emirates couldn't even be bothered with the place, and Qatar and Turkish have been taking up the regional demand, yet haven't seen fit to really grow there at all.
to Ben's question about how they reduced finance costs, EY noted strong cash generation. Airlines typically generate large amounts of cash and for a growing profitable airline, that cash can quickly be used for profits or debt repayment.
They haven't provided all of the financials but I imagine they are simply able to pay down debt due to strong demand and healthy fares.
"Prior to the pandemic, Etihad engaged in possibly the worst airline investment strategy in history, in order to create the Etihad Airways Partners concept."
It was almost as disastrous as the Swissair's 'Hunter Strategy', devised by McKinsey and responsible for Swissair's demise. SAir acquired significant stakes in Sabena, Air Liberté, AOM, Air Littoral, Volare, LOT, Turkish Airlines, South African Airways, Portugália and LTU. With plans for stakes in Aer Lingus, Finnair, Malév, TAM, Transbrasil and...
"Prior to the pandemic, Etihad engaged in possibly the worst airline investment strategy in history, in order to create the Etihad Airways Partners concept."
It was almost as disastrous as the Swissair's 'Hunter Strategy', devised by McKinsey and responsible for Swissair's demise. SAir acquired significant stakes in Sabena, Air Liberté, AOM, Air Littoral, Volare, LOT, Turkish Airlines, South African Airways, Portugália and LTU. With plans for stakes in Aer Lingus, Finnair, Malév, TAM, Transbrasil and Alitalia!
So Etihad's strategy was eerily familiar for those of us who were around in the 1990s.
Is there an industry that’s not been utterly ruined by overzealous McKinsey analysts who just finished their MBAs and want to make a mark?
The quickest way to become a millionaire is to start as a billionaire and then consult McKinsey for advice
Consultants are almost always a scam. Industry should just die out.
Beat me to it. Though I'd definitely say that Swissair's was more disastrous, as it basically took the carrier down. The horrid crash of flight 111, didn't help either.
Impressive results.
Their route network still seems much smaller than the Flying Reimagined days. Surely there are plenty of destinations they can sensibly restore?
SFO and LAX should both be pretty easy and lucrative restorations.
Knowing their commercial leadership team, they will not deviate from the script of what works. If they have publicly said no to US West Coast, they probably are not looking into it. What I have been impressed with the razor focus on where to grow, and not deviating from it. Places like Africa where they don't play well, they don't go. No misadventures to Brazil, etc. I think this is a sign of their confidence...
Knowing their commercial leadership team, they will not deviate from the script of what works. If they have publicly said no to US West Coast, they probably are not looking into it. What I have been impressed with the razor focus on where to grow, and not deviating from it. Places like Africa where they don't play well, they don't go. No misadventures to Brazil, etc. I think this is a sign of their confidence in themselves versus needing to do 100 things. That is a big difference from the past in my view.
There is no such permanency in the commercial aviation industry. EY could just as easily announce those routes tomorrow, should anything appear to shift such markets into their advantage/favor.
And rest assured, they are indeed constantly monitoring them, regardless of whatever they've publicly claimed.
"Passenger revenue was $5.67 billion, compared to $4.54 million the year before"
Do you mean $4.54 billion the year before?
@ Ken -- Whoops, indeed. Fixed. Thanks!
Very, very well done, Etihad! An airline that keeps its head down and goes about its business, but fantastically, without EK’s or QR’s big marketing and to some extent PR bluster. While of course QR has fabulous hard and soft products, it can drop the ball pretty badly at times, which Etihad seldom does. It’s lovely to see EY do well in terms of both product and profitability; too bad Airberlin and Jet Airways didn’t...
Very, very well done, Etihad! An airline that keeps its head down and goes about its business, but fantastically, without EK’s or QR’s big marketing and to some extent PR bluster. While of course QR has fabulous hard and soft products, it can drop the ball pretty badly at times, which Etihad seldom does. It’s lovely to see EY do well in terms of both product and profitability; too bad Airberlin and Jet Airways didn’t live to see this day.
Hope Riyadh Air goes down the same route when it launches, as I imagine RX will be cut from the same cloth as EY — especially with Tony Douglas at the helm. It’ll be an EVA vs Starlux of sorts, but with a bit less drama!