Etihad Airways posts a $1.87 billion loss, in the worst blow for Gulf carriers
Abu Dhabi-based airline hurt by low oil price, equity alliance - Dubai rival Emirates reported first profit drop in five years
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Bloomberg - July 27, 2017 06:05 Updated on July 27, 2017 08:39
- Abu Dhabi-based airline hurt by low oil price, equity alliance
- Dubai rival Emirates reported first profit drop in five years
Etihad Airways recorded a $1.87 billion annual loss, revealing the full extent of the pressures facing Persian Gulf carriers as they grapple with the impact of terrorism on global traffic flows and a low oil price that's crimped local travel.
The 2016 loss came after Abu Dhabi-based Etihad booked a $1.06 billion charge from writing down the value of aircraft and a further $808 million hit from the reduced value of stakes in so called equity partners including struggling Air Berlin Plc and Italy's Alitalia SpA, which filed for bankruptcy in May.
The earnings reversal, revealed Thursday, comes after Dubai-based Emirates, the biggest Gulf carrier and the world's largest long-haul airline, in May reported its first annual profit decline for five years. Mideast operators are facing the first serious challenge to years of breakneck expansion that have seen them exploit their position at a natural crossroads to win a major share of the lucrative inter-continental travel market.
"This year is just as challenging for the global aviation industry and the ever-evolving competitive environment is likely to impact overall performance in 2017," Ray Gammell, interim chief executive officer of Etihad Aviation Group, said in a statement.
The loss was equivalent to almost 40 percent of Etihad Air's passenger revenue and more than 20 percent of its overall revenue of $8.36 billion. The company, which had a profit of $103 million a year earlier, didn't publish full group numbers, and the hit from partners includes only the impact of commercial ties rather than losses there.
Pressure on Gulf carriers has mounted further this year after President Donald Trump's administration sought to... More https://www.bloomberg.com/news/articles/2017-07-27...