Abu Dhabi carrier Etihad Airways reports third year of losses

The government-owned Etihad Airways has lost $4.75 billion in the last three years. (AP)
Updated 14 March 2019
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Abu Dhabi carrier Etihad Airways reports third year of losses

  • Etihad reported losses of $1.52 billion for 2017 and $1.95 billion in 2016
  • Etihad blamed ‘challenging market conditions and effects of an increase in fuel prices’ in part for the loss

DUBAI: Abu Dhabi’s Etihad Airways said Thursday it lost $1.28 billion in 2018, the third-straight year the government-owned long-haul carrier has lost over a billion dollars.

Since 2016, Etihad has lost a total of $4.75 billion as its strategy of aggressively buying stakes in airlines from Europe to Australia to compete against Emirates and fellow rival Qatar Airways exposed the company to major losses.

In the time since, it has embarked on a cost-cutting initiative and recently announced it would restructure planned aircraft purchases from Airbus and Boeing.

“Our transformation is instilling a renewed sense of confidence in our customers, our partners and our people,” Etihad Aviation Group CEO Tony Douglas said in a statement announcing the results.

The airline reported revenues of $5.86 billion in 2018, down from $6 billion in 2017. It flew 17.8 million passengers last year, down from 18.6 million the year prior.

Previously, Etihad reported losses of $1.52 billion for 2017 and $1.95 billion in 2016. It blamed “challenging market conditions and effects of an increase in fuel prices” in part for the loss in 2018.

Abu Dhabi’s rulers launched Etihad in 2003, competing with the established Dubai government-owned carrier Emirates that flies out of Dubai International Airport only 115 kilometers away. Last year, Etihad began loaning pilots to Emirates under a new program.

In February, Etihad said that it will take delivery of five Airbus A350-1000, 26 Airbus A321neos and six Boeing 777-9 aircraft “over the coming years.” The airline said it also will continue to accept its orders for Boeing 787 Dreamliners, without elaborating.

It said its remaining orders will be affected by “rescheduling, restructuring or reduction.” In its 2013 purchase, Etihad made orders for 87 Airbus and 56 Boeing aircraft. Etihad currently has a fleet of 106 aircraft.

Both Emirates and Etihad have seen business hurt by President Donald Trump’s travel bans affecting Muslim-majority nations and stricter rules on electronics in cabins.

The two airlines are government-owned carriers in the United Arab Emirates, a federation of seven sheikhdoms on the Arabian Peninsula. Both compete in the long-haul carrier market, using their nation’s location between East and West to their advantage.


In nod to debt concerns, China Belt and Road summit to urge sustainable financing

Updated 21 April 2019
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In nod to debt concerns, China Belt and Road summit to urge sustainable financing

  • The Belt and Road Initiative envisions rebuilding the old Silk Road to connect China with Asia, Europe and beyond
  • But the initiative has proved controversial in many Western capitals, particularly Washington

SHANGHAI: World leaders meeting in Beijing this week for a summit on China’s Belt and Road initiative will agree to project financing that respects global debt goals and promotes green growth, according to a draft communique seen by Reuters.
The Belt and Road Initiative is a key policy of President Xi Jinping and envisions rebuilding the old Silk Road to connect China with Asia, Europe and beyond with massive infrastructure spending.
But it has proved controversial in many Western capitals, particularly Washington, which views it as merely a means to spread Chinese influence abroad and saddle countries with unsustainable debt through nontransparent projects.
The United States has been particularly critical of Italy’s decision to sign up to the plan last month, the first for a G7 nation.
In an apparent nod to these concerns, the communique reiterates promises reached at the last summit in 2017 for sustainable financing — but adds a line on debt, which was not included the last time.
“We support collaboration among national and international financial institutions to provide diversified and sustainable financial supports for projects,” the draft communique reads.
“We encourage local currency financing, mutual establishment of financial institutions, and a greater role of development finance in line with respective national priorities, laws, regulations and international commitments, and the agreed principles by the UNGA on debt sustainability,” it added, referring to the United Nations General Assembly.
The word “green” appears in the draft seven times. It was not mentioned once in the summit communique from two years ago.
“We underline the importance of promoting green development,” the draft reads. “We encourage the development of green finance including the issuance of green bonds as well as development of green technology.”
The Chinese government’s top diplomat, Wang Yi, said on Friday that the Belt and Road project is not a “geopolitical tool” or a debt crisis for participating nations, but Beijing welcomes constructive suggestions on how to address concerns over the initiative.
A total of 37 foreign leaders are due to attend the April 25-27 summit, though the United States is only sending lower-level representatives, reflecting its unease over the scheme.
The number of foreign leaders at the April 25-27 summit is up from 29 last time, mainly from China’s closest allies like Pakistan and Russia but also Italy, Switzerland and Austria.
China has repeatedly said Belt and Road is for the benefit of the whole world, and that it is committed to upholding globally accepted norms in ensuring projects are transparent and win-win for all parties.
“We emphasize the importance of the rule of law and equal opportunities for all,” the draft reads.