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Etihad Airways Chief Executive Says It’s “Business As Usual” Despite Route Cutbacks

Etihad Airways Chief Executive Says It’s “Business As Usual” Despite Route Cutbacks

Etihad Airways Chief Executive Says It's "Business As Usual" Despite Route Cutbacks

In an interview with the American business news channel, CNBC, the chief executive of Etihad Airways, Peter Baumgartner, has claimed its “business as usual” despite a number of cutbacks and route closures recently announced by the financially struggling Persian Gulf airline.

Last year, the Abu Dhabi-based airline announced a huge loss of $1.87 billion USD for 2016 – at the time, the airline said a “culmination of factors” had resulted in what it referred to as “disappointing” results. Etihad is still to release its financials for 2017 but analysts don’t expect the airline to fare much better.

Yet despite the setbacks, Baumgartner told CNBC: “The core airline has always been operating in a very, very solid way even in the most challenging times.”

He described a combination of the collapse in oil prices, geopolitical problems, overcapacity and falling ticket prices in the last couple of years as a “perfect storm” – although he maintained that while yields (the amount earned from each ticket sale) had fallen, load factors remained very high.

Many observers have pointed the finger of blame for Etihad’s woes at the airline group’s former chief executive, James Hogan. The 62-year old Australian was forced to step down from his post last year, having been at the helm of Etihad’s reinvention since 2006.

Hogan led the airline in a series of financially disastrous airline investments, including now-defunct airberlin and bankrupt Italian carrier, Alitalia. The programme, known as Etihad Airways Partners has been subject to a huge review which has seen Etihad withdraw funding from its ailing investments and instead focus on its core business.

Baumgartner says the airline is still evaluating its business – so far, the review has seen it make plans to drop Perth, Australia and Edinburgh, Scotland from its schedules later this year.

Frequent flyers have bemoaned a number of cutbacks made over the last 12-months in an attempt to save money. Etihad has axed free chauffeur transfers, save for in Abu Dhabi for its premium guests, slashed other complimentary perks and introduced a number of ways to increase ancillary revenue.

“This is a constant evaluation that is not a one-time cut and then you are done for the next 10 years,” explains Baumgartner.

“This is a very agile business in a very agile environment, so it’s kind of business as usual,” he continued.

Baumgartner joined Etihad in 2005, having previously worked at Swiss International Airlines. He was promoted to the position of chief executive at Etihad Airways in 2016.

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