Etihad to Report First Q1 Profit, But Corp. Travel Still ‘Hugely Suppressed’

Etihad Airways will report its first-ever profitable first quarter, Etihad CEO Tony Douglas said Thursday at the CAPA Airline Leader Summit in Manchester, England.

The company improved first-quarter 2021 results with a “$ 1 billion [earnings before interest, taxes, depreciation and amortization] turnaround, and $ 1.25 billion turnaround on core operating profit, “Douglas told BTN.” It puts us in a far better mood now than we were at this time last year. “

The carrier’s momentum built in the second half of 2021, particularly in the fourth quarter, and carried into 2022, Douglas said, adding that load factors in March 2022 were better than March 2019. “That’s not to suggest we are back to 2019 — we most certainly are not, but it’s a big signal for us that we are seeing signs of a recovery. “

Corporate travel, however, remains “hugely suppressed,” Douglas said. Some corporations are just starting to “come back in and operate in a way in which we are familiar with pre-pandemic, [though] many still from a policy point are avoiding it. “

What Etihad has seen take off is a “sizeable increase” in demand for its business-class cabin, but traditional business travelers aren’t the ones filling it. Douglas said it’s travelers who see the value in the cabin’s space and amenities from a wellness standpoint, and who have little or no credit card debt and more disposable income.

“It may prove to be a trend,” Douglas added. As for whether that means business travelers will have more difficulty finding premium seats as they return to the skies, “that’s a high-class problem,” he said. “It’s something that may or may not occur as business travel comes back. [Leisure customers] may have gotten [their pent-up travel] out of their system. … But as the corporate travel market opens back up, they’ll have exciting new options to choose from. “

Douglas was referring to the new business and economy classes on board the Airbus A350-1000, which the carrier put into operation March 31. The aircraft’s business class offers 44 studios with sliding doors for privacy. Each seat has direct aisle access and converts into a fully lie-flat bed with 79 inches in length. Passengers are offered noise-canceling headphones, an 18.5-inch TV screen, a built-in wireless charging dock and Bluetooth headphone pairing. The A350 economy class is configured with 327 seats in a 3-3-3 arrangement, including 45 ‘Economy Space’ seats with an additional four inches of legroom.

“We’ve made a business-plus proposition, using roughly the same real estate, but you’ve got a proper studio of your own with private space, such that I would suggest that many North American or Western European travelers would conclude this is better than most people’s first class, “Douglas said. “But it’s commercially efficient in the way it’s designed and very sustainable. It’s deliberately designed for the discerning corporate market and for people who wish to have that level of comfort refinement.”

The company will receive four more A350s this year and has orders and options that can bring that total up to 20, Douglas said. Another aircraft Etihad operates is the Boeing 787 Dreamliner, and the plan is to have 11 of them “over time.” Those two aircraft “are the mainstays now of our fleet, and are the world’s most efficient aircraft,” he added. “They are game-changers in their own right.”

Douglas also cited as another draw for the business market is Etihad’s recently launched Conscious Choices program, through which corporate clients can make sustainability-based choices, including paying a green surcharge and investing in offset solutions and sustainable aviation fuel. “Corporate green loyalty is going to be far more important going forward than it’s ever been,” he said, adding that almost every corporate client has said, “‘We just can not do this.’ ”

Corporate clients have embraced sustainability options, because the alternative is to say “I’ve made a conscious choice not to,” Douglas said. “And if you’ve made a conscious choice not to, going back to your [corporate social responsibility] agenda as a corporate, it’s possible you may come under more scrutiny. So it has been received extremely well. What the corporates like about it is it is simple and easy to understand. Quite frankly, what we see in this is yet another way of drawing attention to the way in which everybody can contribute to this. The Etihad guest loyalty program is an essential element in the way we operate our business. But we see it now as even a bigger bridge into the green space. “

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