While airlines around the world have been urgently cutting capacity to stem losses, the leading carriers in the Middle East such as Qatar Airways, Emirates and Saudi Airlines have been investing heavily in their fleets and networks and winning market share, both in the passenger and freight markets.
The creation of world class hubs linking East with West and North with South is also paying off handsomely in the shape of sizable contributions to national wealth through increased tourism and trade, as well as boosting efforts to diversify from economic reliance on oil revenue and reinforcing links to fast-growing markets in Asia and Africa.
Etihad Airways is following much the same path as its neighbors and rivals, and managing to remain in the black. The national carrier of the United Arab Emirates reported net profit of US$42 million in 2012, up 200 percent on 2011 after a revenue gain of 17 percent took earnings to $4.8 billion.
Etihad Cargo played an important role, delivering annual tonnage growth of 19 percent last year on the back of a capacity increase of 14 percent in available ton kilometers. The figures increased again this year, with tonnage up 20 percent to 101,776 tons in the first quarter, and cargo revenue of US$193 million, representing an increase of 17 percent year-over-year.
David Kerr, vice president of cargo, told The Journal of Commerce that further growth is planned. “The cargo business is a big part of the airline which itself has a key role to play in the development of the Abu Dhabi economy in terms of trade and tourism,” he said. “Our mandate is to be the best in class globally and also to make money.
“How we do that is by combining our cargo assets, both owned and wet leased, and blending that with the overall growth of the airline.”
While Abu Dhabi is a mainly inbound air freight market, the United Arab Emirates is also a major global trade center. “Abu Dhabi is on a growth curve, with many major infrastructure projects under way, which drives inbound growth,” Kerr said. “We’re keen to take our share of any business coming through the UAE, and we are also a transit hub with global links.”
Etihad Cargo flies to 88 destinations internationally with 40 percent of cargo uplift capacity supplied by its six-strong freighter fleet, which will be reinforced with three more additions in the coming year (B747-8F, B777F, A330F), and the rest via bellyhold services.
Earlier this year, Etihad Cargo, which recently updated its summer schedule and started a new forward rewards program, launched a cargo-only service to China, linking Abu Dhabi to the southern Chinese city of Guangzhou every Thursday using an Airbus A330-200F freighter. This is designed to complement the nine-weekly existing freighter services to Shanghai and Beijing and 18 scheduled bellyhold services to Shanghai, Beijing and Chengdu, which make up the carrier’s current schedule in China.
Kerr expects the new service to feed its network of connections in the Middle East and Africa with, primarily, exports from China’s southern coast where Guangzhou is a major center for manufacturers.
He said China-Africa business is showing particularly good growth, and the carrier was also interested in improving the depth of its services in China, if regulations allow, and across Africa.
India is another key market moving forward, not least with a six times per week freighter service via Abu Dhabi linking China to India.
Kerr said Etihad Cargo is not looking to ape its regional rivals in terms of growth patterns and is instead focused on what strategy will work best for Etihad Airways through the precise targeting of specific routes where the company can offer product differentiation.
“We’re looking to develop particular trade lanes,” he explained. “For example, we don’t have a huge strategic imperative to drive Asia to Europe business, which suffers from overcapacity and has shown signs of distress. But Asia to Africa has grown well, and we are looking at new opportunities with a focus on the Middle East and UAE and connections to other growth markets.”
Contact Mike King at email@example.com.