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This marked the third successive year of net profitability, in the airline’s tenth year of operation.
James Hogan, President and Chief Executive Officer of Etihad Airways, said: “This is another important step forward in our journey as a growing, commercially successful business. We have hit every financial target for each of the last seven years, bringing sustainable profitability to a business which has grown from just $ 300 million in revenues in 2005 to more than $ 6 billion today.
“We have delivered that through our unique strategy, which has seen us combine industry-leading organic growth with wide-ranging partnerships and minority equity investments in strategically important carriers around the world.
“This journey has seen us evolve from a highly successful airline into a growing aviation and travel group, with the infrastructure and strategy to develop even further in our second decade.
“We are particularly pleased to deliver a return for our shareholder, while also playing a major role in the development of trade and tourism within the emirate of Abu Dhabi.”
Financial performance
Revenue increased by 27% to $ 6.1 billion (2012: $ 4.8 billion), on passenger numbers up 12% to 11.5 million (10.3 million).
Revenue Passenger Kilometres (RPKs) – measuring passenger journeys - increased by 16% to 55.5 billion (47.7 billion), while Available Seat Kilometres (ASKs) – representing capacity - grew by 17% to 71.1 billion (61 billion).
These figures reflected strong growth in passenger traffic volumes, in a year when Etihad Airways added six new destinations – Washington DC, Amsterdam, Sao Paulo, Belgrade, Ho Chi Minh City and Sana’a - and increased capacity on 18 existing routes. At year’s end, the average 
network-wide seat load factor was 78%, unchanged from 2012.
The airline has announced nine new destinations for 2014 – the US cities of Los Angeles and Dallas-Fort Worth, the European gateways of Rome and Zurich, Jaipur in India, Perth in Western Australia, Phuket in Thailand, Medina in Saudi Arabia and Yerevan in Armenia.
Codeshare success
A key driver of Etihad Airways’ growth in 2013 was its partnership strategy, based on wide-ranging codeshares and its unique approach of minority equity investments in strategically important airlines. This has accelerated network growth, giving it the largest route network of any Middle Eastern carrier, reaching almost 400 destinations; boosted sales and marketing opportunities in key markets around the world; and allowed significant business synergies and cost savings.
This strategy delivered revenues of $ 820 million in 2013, up 30% ($ 629 million), and represented 21% of total passenger revenues for Etihad Airways.
Hogan said: “Our codeshare partnerships have been an important part of our business performance for the last seven years. But it is our equity investments which are really taking off now, allowing us to build integrated networks and schedules, develop common products and services and most importantly, identify business and cost synergies. These synergies are outstanding. Our joint purchasing taskforces are delivering real and significant savings across all equity alliance members, giving each of us real competitive advantage through lower unit costs.”
In addition to its four existing equity partners – airberlin, Air Seychelles, Virgin Australia and Aer Lingus - Etihad Airways announced investments in three additional carriers in 2013.
Regulatory approval was received in November to acquire a 24% stake in India’s Jet Airways. At year’s end, Etihad Airways was awaiting regulatory approval for two other investments, a 49% stake in Serbia’s national carrier, Air Serbia (formerly Jat Airways) and a 33.3% shareholding in Darwin Airline, a regional carrier based in Switzerland.
Strategic focus
In August, Etihad Airways formalised a five-year contract to manage Air Serbia. Then, in November, Etihad Airways announced the creation of a new sub-brand, Etihad Regional, which Darwin Airline would become the first to adopt.
Etihad Airways also increased its stake in Virgin Australia from nine per cent to 19.9% through incremental on-market purchases, after receiving approval mid-year from Australia’s Foreign Investment Review Board. Etihad Airways demonstrated further support for Virgin Australia by participating in its AUD$ 350 million capital raising.
Etihad Airways commenced seven new codeshare partnerships in 2013, entering agreements with South African Airways, Kenya Airways, Air Canada, Korean Air, Air Serbia, Belavia and Air Baltic, taking the portfolio total to 47. Together with the equity partner airlines, these deals increased the virtual network of Etihad Airways to almost 400 destinations.
Etihad Airways’ cargo division delivered a standout performance in a stagnant air freight market, with cargo revenues up 30% to $ 928 million ($ 716 million) on volumes up from 367,837 to 486,753 tons.
In 2013, the airline received 16 passenger jets, of which 11 were new aircraft – six wide-bodied Boeing 777-300ERs, four narrow-bodied Airbus A320-200s and the airline’s first Airbus A321.
There were also five wide-bodied Airbus A330-200s obtained from Jet Airways, three of them leased and two purchased.
Etihad Cargo added three new freighters – two Boeing 777-200Fs and one Airbus A330-200F. It also “wet leased” a Boeing 747-400ERF from KLM Royal Dutch Airlines, and a Boeing 747-8F from US operator Atlas Air to replace two older aircraft.
Largest fleet order
In November, 2013, coinciding with its tenth anniversary, Etihad Airways signalled its long-term growth intentions when it announced the largest fleet order in its history, for up to 199 aircraft and 294 engines, at a current list price of approximately $ 67 billion.
Firm orders were announced for 87 Airbus and 56 Boeing aircraft, with 56 options and purchase rights to support additional growth opportunities, not only for Etihad Airways, but potentially for members of its airline equity alliance.
The new aircraft deals also include rights to defer deliveries if required. Combined with existing orders, including 41 Boeing 787 Dreamliners, 10 Airbus A380 super jumbos and 12 Airbus A350XWB (extra wide body), the November fleet announcement increased the airline’s pipeline of new aircraft on firm order to more than 220.
In 2014, Etihad Airways plans to introduce 18 new aircraft, including its first Boeing 787-9 Dreamliner and Airbus A380 super jumbo, both of which are scheduled for delivery in the fourth quarter. The airline also concluded late in December an agreement to acquire five Boeing 777-200LR jets from Air India to help accelerate network growth.
At the close of 2013, Etihad Airways employed 13,535 employees in the core airline business, an increase of 27% over the 10,656 in 2012. Including the new Etihad Airport Services subsidiary, the group employed a total of 17,603 people from 142 nationalities.
Of this number, the core airline employs 1,468 UAE nationals, 17% more than 2012. The Etihad Airways Emiratisation program includes schemes for cadet pilots, engineers and graduate managers, in sales and at airports.
