The Abu Dhabi-based carrier’s sub-fleet of five Airbus 330 freighters were sidelined last January and not activated since. According to reports in local Gulf media they are meanwhile up for sale.
Excessive growth sometimes can have a boomerang effect, as exemplified by Etihad Airways (EY) these days. The carrier, operating 120 passenger and cargo jetliners, has pending Boeing and Airbus
orders amounting to 175 wide-body aircraft (CFG 8th July). A heavy burden in view of their shaky market situation. And in view of their debts that have grown in the past even faster than their
fleet, meanwhile totaling accumulated losses of estimated US$3.5 billion (€2.98 bn).
Time for action
And a turnaround is not in sight, although losses went down last year to US$1.5 billion from US$1.95 billion in fiscal 2016. A gradual improvement, no more and no less.
Therefore, it’s time for action, decided their new CEO Tony Douglas, supposedly “motivated” by state owner Abu Dhabi Emirate urging him to step on the brakes and navigate the financially struggling carrier back on course. With this marching order in mind, the EY managers are working on various strategies to get out of the valley of tears.
One option could be to engage in binding ties with Emirates Airlines (CFG 8th July). Other steps for bettering finances are cost cutting programmes and staff reduction measures. Selling aircraft that don’t generate profits are other means of lowering deficits. This is all the more the case with regard to the A330Fs that trail the airline’s five Boeing 777 freighters in terms of capacity and operational efficiency. Therefore, the management’s intention to sell them seems to be a wise decision, market observers believe.
Shrinking freighter fleet
According to a report in Arabian Business the selling process is in an “advanced stage.” However, it is unknown at this stage which carrier or leasing company Etihad is currently negotiating with.
Provided, the deal is accomplished, EY’s freighter fleet of formerly ten will shrink remarkably, then comprising only five B777Fs.
On another note, at the end of June Etihad offered its pilots a 2-year secondment to Emirates Triple Seven Fs, B777-300ESRs and their A380-800s. This move was made to avoid placing EY cockpit staff on unpaid leave. Emirates is struggling with pilot shortage, which slows down its growth.
Is this now the first move for an eventual bonding of both carriers in the near future as previously questioned by CargoForwarder Global? Time will tell.
Heiner Siegmund / John Mc Donagh