Daijiworld Media Network - Abu Dhabi (SHP)
Abu Dhabi, Feb 5: Abu Dhabi's long-troubled Etihad Airways on Tuesday said that it is planning to sell 38 aircraft to an investment firm and a leasing company in a deal valued at USD 1 billion. This move is one of the latest cost-cutting measures by the United Arab Emirates' national carrier.
Etihad will be looking at the sale of 38 aircraft 22 Airbus A330s and 16 Boeing 777-300ERs in the deal with investment firm KKR and leasing firm Altavair AirFinance. KKR said the Boeing 777-300ERs will be leased back to Etihad upon purchase in early 2020, while the Airbus A330s will go to international clients.
Etihad claimed that the step is taken in the third year of the transformation program. The deal offers us flexibility while ensuring we stand by our sustainability targets and maintain a fleet of the most fuel-efficient, technologically advanced aircraft, the airline said in a statement.
On their official website, Etihad listed having a fleet of 102 aircraft. There was no more mention of A330s among its fleet, it is more likely that Etihad has begun phasing those aircraft out. The 16 Boeing 777s it will sell and lease back represent 15 per cent of its current fleet. Since 2016, Etihad has lost a total of USD 4.75 billion as its strategy of aggressively buying stakes in airlines from Europe to Australia to compete against Emirates and fellow rival Qatar Airways which exposed the company to major losses.
In 2018, the airlines posted a loss of USD 1.28 billion. Meanwhile, the results for 2019 has not been released yet. In the time since 2016, it has embarked on a cost-cutting initiative and recently announced it would restructure planned aircraft purchases from Airbus and Boeing. The airline reported revenues of USD 5.86 billion in 2018, down from USD 6 billion in 2017.
Abu Dhabi's rulers launched Etihad in 2003, competing with the established Dubai government-owned carrier Emirates that flies out of Dubai International Airport only 115 kilometres (70 miles) away. In 2018, Etihad began loaning pilots to Emirates under a new program. Both Emirates and Etihad suffered in business after President Donald Trump's placed travel bans in Muslim-majority nations.
The Abu Dhabi International Airport has a US Customs and Border Protection pre-clearance facility, allowing passengers arriving in America to leave promptly. It is the only such facility in the Middle East. The two airlines are government-owned carriers in the United Arab Emirates, a federation of seven sheikh-doms on the Arabian Peninsula. Both compete in the long-haul carrier market, using their nation's location between East and West to their advantage.