Etihad Airways reduced its losses in core operations by US$432 million during financial 2017, but still lost US$1.52 billion over the year.
Revenues from core operations at the Abu Dhabi-based carrier increased by 1.9 per cent to US$ 6.1 billion.
The figures come as the carrier continues to face challenge, including significant fuel cost increases, the entry into administration of its equity partners Alitalia and airberlin, and initial investment in a comprehensive business transformation programme.
Passenger and cargo yields improved as a result of capacity discipline, changes to the network with an increased focus on point-to-point traffic, leveraging of technology, and improving market conditions, Etihad said.
A strong focus on efficiency delivered a 7.3 per cent reduction in unit costs, despite the adverse impact of US$337 million from higher fuel prices.
Mohamed Mubarak Fadhel Al Mazrouei, chairman of the board of Etihad Aviation Group, said: “Our airline continues to be a key driver of Abu Dhabi’s vision to develop its tourism sector, grow commerce and strengthen links to key regional and international markets.
“This was a pivotal year in Etihad’s transformation journey.
“The board, new executive leadership team and all our employees worked extremely hard to navigate the challenges we faced.
“We made significant progress in driving improved performance and we are on track in 2018.”
Etihad Airways carried 18.6 million passengers last year, at a 78.5 per cent load factor.
Available Seat Kilometres increased by one per cent in 2017, reflecting a significant moderation of capacity growth, and contributing to an improvement in the quality of the airline’s revenues.
The airline reduced administration and general expenses by 14 per cent, or US$ 162 million, over 2016.
Etihad Cargo reduced capacity by six per cent; however, revenues declined only marginally, down 0.8 per cent, driven by stronger load factors and yields.
Etihad Cargo carried 552,000 tonnes of cargo in 2017.
Tony Douglas, group chief executive of Etihad Aviation Group, added: “We made good progress in improving the quality of our revenues, streamlining our cost base, improving our cash-flow and strengthening our balance sheet.
“These are solid first steps in an ongoing journey to transform this business into one that is positioned for financially sustainable growth over the long term.
“I would like to thank our people for their hard work and dedication in 2017.
“It is crucial that we maintain this momentum, retaining talent and attracting leading professionals from around the world to work alongside our highly-skilled UAE national workforce.”
Etihad Airways received twelve new aircraft in 2017, including two Airbus A380s, nine Boeing 787-9 Dreamliners, and an Airbus A330F.
These aircraft replaced 16 older Airbus A340, A330, A319 passenger and A330F cargo aircraft, which exited operations, thereby reducing the average fleet age to just six years.
In 2017, the airline announced that it will cease operating to Dallas/Fort Worth, Entebbe, Jaipur, San Francisco, Tehran, and Venice.
A new route between Abu Dhabi and Baku was launched in March 2018 and services to Barcelona will start on November 21st.
Peter Baumgartner, chief executive of Etihad Airways, said: “Our transformation process has delivered tangible results to date, with a significant improvement in performance for 2017.
“Passenger yields for the last quarter were up a very healthy nine per cent versus the same period a year before.
“On-time performance was at record levels and operationally we continue to drive down costs without compromising on safety or quality across all areas of the business.
“The major driver to becoming a more agile and efficient organisation, resilient in a very competitive landscape, is our continued investment in skilled professionals, technology and digital innovation, which is going to allow us to become smarter, faster and even more responsive to the ever-changing needs of our customers, making Etihad the airline of choice.
“These developments are at the heart of our transformation strategy.”