Etihad Airways Loss 2020: Covid-19 Leads to Millions in Losses

The United Arab Emirates has always flown high on its tourism and yet this year Abu Dhabi’s Etihad Airways reported hundreds of millions in half-yearly losses. Coronavirus not only killed people, but also industries, opportunities and visions that lay dead, infected by the humongous impact made by the virus globally.

Abu Dhabi’s Etihad Airways reported that it lost $758 million in the first half of 2020 following a 40% collapse in the revenue due to Covid-19 pandemic. Statistically, Saudi Arabia may be the top recipient of tourists in the MENA region, but only because it hosts millions of Muslims every year for Hajj pilgrimage. UAE receives the second highest number of tourists in the Arab region. However, the lockdown following coronavirus led to the Etihad Airways loss amounting to millions.

Despite being the top carrier in Middle East, Etihad experienced the biggest losses in the first half of 2020, owing to the pandemic-led lockdown, which heavily impacted the hospitality and tourism industry worldwide. Etihad loss in Covid-19 was part of the global impact, but Etihad Airways loss has existed even before the pandemic destroyed the aviation industry around the world.

Before the Etihad Airways loss 2020 took place, the carrier bore $586 million in losses in the first half of 2019. The Abu Dhabi-owned airways carried 3.5 million less passengers as compared to the previous year, i.e. in the first six months of 2020 Etihad flew 60% less passengers.

Following the drop in revenue and surge in losses, Etihad also resorted to cutting down staff salaries at the beginning of April 2020 and laying off employees to reduce costs.

However, keeping aside the Etihad Airways loss, the revenue generated by the carrier totaled to $1.7 billion in the first half of 2020. The airways were able to make a decent profit despite reducing operating costs to 27% in 2020. Meanwhile, in 2019, when the number of passengers was 60% higher in relation to the current year, the gains were $2.7 billion — which is double the profits. A slight improvement was also seen in the airline’s cargo operations during the first three months of this year.

Etihad Airways loss goes back to 2016, as since that year the airlines met its destitute fate, losing approximately $4.75 billion and more. This was reportedly a result of the aggressive strategy towards buying of stakes in European and Australian airlines, which made the Abu Dhabi-owned airways vulnerable to significant financial dangers.