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Oil prices may not off-track Etihad from breakeven
ABU DHABI - The higher oil prices will not off-track the targeted financial breakeven this year, as the UAE’s national air carrier Etihad Airways has hedged over 70 per cent of its oil requirements for the year, its chief operating officer said.
“Volatility in the oil prices is affecting the airline industry, now the question is how well hedged you are...and the Etihad Airways have a very successful hedging programme, which is giving the ability to manage the exposure you have,” Peter Baumgartner, the chief commercial officer told reporters on the sidelines of an event, in which the airline added a new top tier Gold Elite class to its frequent flyer programme.
The chief operating officer said that Etihad Airways has hedged over 70 per cent of its oil requirements for the year, which allows it to manage the cost fluctuations. “It does not bring us of track the financial breakeven,” he added.
Baumgartner said “Etihad had a positive EBITDA or Earnings before interest, taxes, depreciation and amortization last year, which is a first step towards a full breakeven, which we are committed to achieve this year.”
Asked to comment on the recent criticism from some of the leading European air carriers, who have charged the Gulf airlines for undue advantage from their governments, the chief operating officer said, “ You know we are not subsidized, no kick backs, no state guarantees.”
He said, “I am glad to see that they are slowly maturing and drying out because, there is no evidence what so ever...just allegations and statements.”
The COO urged his European counterparts to accept the fact that the Middle Eastern airlines are going strong, and would not go away. So rather than criticising them, they should work with them, he said.
The chief operating officer said that Etihad Airways which will receive the delivery of the 25 Jumbo aircraft during the year and in the first half of next year, does not face a financing need to fund its large scale procurements.
“For the year, we’re fine,” and there would be no problem to raise finances next year also, as the airlines which have a strong credibility, raised loans from the banks last year to fund its current procurements, he said.
“We would never have any problems with financing our aircraft,” the COO said.
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