Once named as the “fastest growing carrier,” Etihad Airways seems now to be flying into continual head winds and has during the past twelve to eighteen months, had to make some hard
decisions in order to cut losses around the globe. This, according to reports in the U.S. press, has led to yet another unhappy decision - fleet reduction.
Have the seven lean years commenced?
A fourteen percent reduction by end 2018
That’s the prognosis also from financial analysts.
The carrier presently has 122 aircraft in their fleet, most of them long-haul Boeings and Airbus types. Quite a jump from 2006 when Etihad only had 22 aircraft on their books. This number rose steadily throughout the past ten years to reach today’s number. It is said that this number will be reduced by almost 14% to 107 aircraft only by the end of this year. This affects both passenger and freighter types. A total of 20 aircraft will go out of service if all information is correct.
U.S. market doldrums are part of the problem
The continued verbal attacks by U.S. carriers against Etihad and other Gulf States airlines has not helped matters either. Etihad’s ambitions to set themselves up as a serious carrier to the United States have seemingly not materialised and they have already ceased their Abu Dhabi - San Francisco route and intend to close Abu Dhabi - Dallas by the end of this winter season. These routes have been operated by Etihad’s Boeing 777 LR (Long Range) aircraft and the result is that five B777LRs will be phased out and probably sold off. The airline has a total of 30 B777 passenger aircraft in service along with 25 A330s, 8 A380s, 9 B787s and 5 A340s. Etihad’s regional fleet is made up of a mixture of 35 A320/A319 and A321 aircraft.
Other destinations on the immediate closure list are said to be Entebbe, Jaipur and Tehran. Insider information shows that Etihad will reduce their annual block-hours by six percent by September this year.
They have ordered a total of 62 Airbus A350 types which when phased in will surely replace older models such as the A340/A330 and triple-sevens.
Cargo figures have declined
Despite the global air freight boom of 2017, Etihad has been fighting an uphill battle as far as generating acceptable cargo volumes and revenues. This has led to the decision to also cut the all freighter fleet considerably.
Five A330-200 freighters are going out of service. Whether they will be just stored to await better times or sold off, remains to be seen. This leaves Etihad with just five B777Fs and one B747F. They have however, still plenty of long-haul belly space to offer.
Five freighters and five passenger aircraft already earmarked for disposal. What about the remaining ten? Most probably the A340 aircraft and some more A330 passenger jets will be on this list.
Hard cost cutting measures
Etihad had to take tough cost cutting measures after the failed investments of their former CEO James Hogan in Air Berlin, Alitalia and other companies. On top of this, heavy competition in the Gulf has generally driven passenger and cargo prices too low. It’s five-minutes-to-twelve for Etihad and only tough measures will ensure they can stay in the Gulf region as competitors to Emirates and Qatar Airways.
Or - will we see Emirates and Etihad as a single carrier in the not too distant future?
John Mc Donagh
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