Etihad is in the midst of re-organizing its business. The airline that launched after Gulf Air eliminated its Abu Dhabi hub by hiring away Gulf Air’s CEO adopted a strategy of buying stakes in troubled airlines around the world and redirecting their connecting traffic through Abu Dhabi. But that didn’t work out very well — the available carriers were in some cases real basket cases and not candidates for turning around with new uniforms and group purchasing agreements.
When energy prices dropped the Al Nahyan family’s appetite for absorbing losses in exchange for growing an international hub airline ran out. They fired the CEO who architected this strategy and they turned the spigot off on air berlin and Alitalia. air berlin has gone out of business and Alitalia is in the midst of a government-subsidized fire sale.
Meanwhile the carrier has been cutting back on unprofitable flying elsewhere. With Air India flying non-stop to San Francisco their connecting traffic on San Francisco – Abu Dhabi was diminished and they elimiated the route. They’ve also eliminated Dallas Fort-Worth, since American Airlines dropped their codeshare arrangement. They’ve cut back on Los Angeles and New York JFK flying as well.
In addition there have been cutbacks in service.
- Chauffeur service outside the UAE is gone.
- They’ve sought to monetize lounge access while removing lounge amenities.
- Gone is ‘Style & Shave’ and food has been cutback in lounges.
- Meal and beverage services onboard have seen cutbacks as well.
- They’ve reduced the size of their fleet.
- They’ve had layoffs.
Now the airline has revealed the extent of its losses in 2017 $1.5 billion — following a $2 billion loss in 2016.
In a statement, the Abu Dhabi-based carrier said that it reduced administration and general expenses by 14 per cent over 2016, and that it cut unit costs by 7.3 per cent. This was despite the adverse impact valued at $337 million from higher fuel costs.
…Revenues in 2017 inched up to $6.1 billion, compared to $5.9 billion a year earlier, as total passengers carried by the airline rose marginally to 18.6 million from 18.5 million in 2016.
I continue to believe a merger with Emirates makes sense, along with a move to the new Dubai airport that’s closer to Abu Dhabi. Battling it out with a mega hub about an hour and a half’s drive away makes little continued sense.
Im on the JFK-AUH-MLE route in February, lets hope they are still in business
I liked Etihad the time I flew them but, seriously, there’s no reason for the UAE to have two global airlines Huber so close together. If the Emirs could stop being teenage boys and have just one, it could really be awesome for both passengers and their bottom line.
I used to go out of my way to connect in JFK to I can fly the Apartments even if I needed to be in Dubai rather than Abu Dhabi. This is pretty sad.
Things have gotten so bad Emirates First Class pax gets American Airlines catering now I’ve heard
Sounds like US carriers were right on the mark about subsidies. Won’t miss service to SFO. We have plenty of better choices based in countires that don’t persecute LGBT, atheists, etc.
Hogan – the previous CEO – was horrible. Blame the Abu Dhabi government…his abysmal track record was public record and they still hired him!
They are spending Billions on a new airport just close by to the existing one! So if they merge with Emirates and move to Dubai World Central in between Abu Dhabi and Dubai, what happens to all the money on this new airport?!
And their customer service should anything go wrong is horrendous. Forget getting anything out of them.
How do some get paid so much to make such incredibly bad decisions? If buying stakes in s-hole airlines and redirecting their traffic through Abu Dhabi was the best idea Ethiad came up with, I’d hate to see options B and C that were rejected.
Once they realized there was a U.S. administration that understood what they were trying to get away with and would retaliate for anti-competitive behaviors, the risk/reward was no longer worth it for them. Which is why we need to enforce fair trade practices. It didn’t take very much in the way of sabre-rattling to send the message loud and clear to the ME3 that they needed to knock it off with the subsidies.
They can compete with Emirates by becoming a low-cost airline. Emirates cannot drop too low because it would hurt their brand image. The closeness of the two hubs is only really an issue if they are both targeting the same market segment.
The lost $2 billion two years ago, and $1.5 billion last year, so using liberal math they actually MADE half a billion!!! Bonuses for everyone!!!!