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aviation


james hogan, CEO, etihad airways


a


t etihad airways we are excited about 2012, concerns about the global economy not withstanding.


Now eight years old, we have established ourselves as one of the fastest growing airlines in the world and as a brand to watch. We have been named World’s Leading


Airline at the World Travel Awards for two years in a row, which is a measure of our commitment to product and service excellence, and we continue to strive to improve our offering both on the ground and in the air. Importantly, the financial strategies


that we put in place as long ago as 2006 are maturing and delivering results, and we expect to deliver sustainable profitability next year, after reaching break-even in 2011. In terms of the wider industry, 2012


will be a very interesting year as Gulf carriers continue to assert themselves globally in difficult financial conditions, particularly in the West. It goes without saying that the performance of the industry is closely linked to the health of the global economy. Historically, when the average global economic growth rate has slowed to less than two per cent, the aviation industry as a whole has struggled to prevent losses. With the global economic growth rate


for 2012 widely forecast to be perilously close to two per cent, the International Air Transport Association (IATA) has recently stated it expects the industry


to make weak net profits: $4.9 billion on revenues of $632 billion, which represents a net margin of just 0.8 per cent. Although the brunt of austerity is expected to be felt in the Eurozone and North America, with developing economies expected to fare considerably better, airlines in the Middle East are certainly not immune to the effects of slowed growth in the West. A slowdown in any market into which Middle East carriers operate will inevitably be felt in decreased numbers of passengers travelling for leisure or business. Cargo volumes could also be hurt by slowed international import/export trade. Oil prices in 2012 are expected to remain


volatile. We will continue our policy of hedging, providing a buffer of certainty against price spikes. As we always have, we will work hard


to navigate the economic landscape and to respond quickly to changed realities. In this respect, we are fortunate that our comparative youth allows us more flexibility and agility than many traditional legacy carriers – we are what I call a new wave carrier, still operating with a clean sheet of paper. Our agility, along with the strength of


Abu Dhabi and its increasing importance as a business and leisure destination, and the millions of potential travellers on our doorstop – not only in the Gulf, but also the huge markets of India and China – will ensure that in 2012, we are not only well positioned to weather global economic difficulties, but to emerge well placed to kick on when the eventual upturn comes.


GULF BUSINESS / 57 fast facts


- abu dhabi’s government-owned national carrier began operations in 2003.


- etihad plans to break even this year.


- the airline currently flies to 86 cities, and is planning to add six new destinations over the next six months.


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