Etihad Airways

Etihad Airways gets springboard into Northern Europe with 2.9% stake in Aer Lingus

The United Kingdom is emerging as an end-game country for the Middle East triumvirate: Emirates has firmly planted itself across the country, Qatar Airways is cosying up to British Airways and Etihad Airways’ 2.9% stake in Aer Lingus has the potential to give it a springboard into the UK, codesharing on Aer Lingus’ wide Ireland-UK network.

The purchase is a minor investment at Aer Lingus’ present share price of under EUR1, but it represents an opening gambit for a further stake, as well as to develop a partnership and codeshare arrangements. Etihad has developed large virtual networks and has bought into carriers, but the Aer Lingus deal could come to make the UK/Ireland the highest strategic saturation point for the Middle East network carriers. In that view, Etihad’s stake was as much strategic as it was defensive. For Aer Lingus there is also a possibly warm feeling, as British Airways recharges its Ireland services, post-bmi acquisition.

Etihad and Ethiopian plan services to Sao Paulo as Latin America-Asia market prepares to grow

Etihad Airways and Ethiopian Airlines intend to launch services to Sao Paulo, the economic heart of the rapidly growing Latin American market. While Sao Paulo is seeing increased capacity from a number of carriers, services from Etihad and Ethiopian are notable for the considerable transfer traffic they will have, including from Asia. Linking the high-growth economies of Asia with their Latin American counterparts has been alluring for many carriers, but distances and aircraft range limitations necessitate all services be one-stop.

Asia-Latin America's traditional, if small time, transfer hubs in North America and Europe have increasingly seen competition from the Middle East. That will be complemented in the next few years with hubs from Africa, first from East Africa and potentially later from West Africa.

The Middle East continues powerfully on thanks to the Gulf carriers, despite some setbacks

The Gulf carriers continued to go from strength to strength in 2011; Etihad made its first (narrow) profit and Emirates again returned the strongest result of any airline globally, even though it was substantially affected by increased fuel prices.

The three major sixth freedom hubs in the Middle East – Abu Dhabi, Doha and Dubai – added 7.7 million passengers between them in 2011, continuing strong growth, despite the regional disruptions. Much of this is testament to the strength of the home carriers, the industry-aligned development policies pursued at each airport and the vision of local governments to transform their cities into major aviation centres. (The contrast with European governments is extreme, as they meanwhile continue to see the sector as a taxation target, to the great detriment of the industry there.)

Etihad Airways nears USD1 billion revenue as quarterly growth slightly outpaces capacity

Following Etihad’s first annual profit, the Abu Dhabi-based airline reported revenue jumped 28% year-on-year for the three months to 31-Mar-2012, to a record USD989 million.

The increase corresponds to a 27.4% surge in passenger traffic in the quarter, up by just over half a million passengers, indicating Etihad is growing revenue very slightly ahead of capacity growth. Etihad Airways added new services to Tripoli, Shanghai and Nairobi during the quarter, with passenger numbers reaching 2,360,000.

Middle East regional carriers have profitable outlook for 2012

IATA’s latest 2012 industry forecast has airlines in the Middle East as the big winners, with the annual profit forecast for the region's airlines revised from USD300 million to USD500 million. It does come with a caveat though: a spike in oil prices could turn the forecast profit into a USD200 million loss for the region’s airlines.

In 2011, airlines in the Middle East reported a combined annual profit of approximately USD1 billion, according to IATA’s estimate. Despite the regional disruptions and spiralling price of oil, passengers in the region kept flying and Middle Eastern carriers increasingly developed their links with the rest of the world.

As they have been for years, financial results for Middle Eastern carriers were unevenly spread across the region.

Emirates responds to airberlin-Etihad alliance with capacity and equipment upgrades to Germany

A significant initial outcome of last year's airberlin-Etihad alliance is the capacity increase airberlin and Etihad have implemented over the past week between Germany and Abu Dhabi. Emirates has responded with its own capacity increases, the fact of which is unsurprising. What is interesting is how Emirates had operated to the restrictive and limited German market with A340-300s, which it is in the process of disposing. Emirates in recent times had largely confined the A340-300, with older and less premium interiors, to secondary markets, but the rapid increase in competition in the form of airberlin-Etihad is seeing Emirates deploy its more competitive Boeing 777-300s.