Etihad Airways CEO Confirms Permanent Retirement Of The A380 Fleet – Goodbye Residence!

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One of the most sought after cabins in the skies – the Etihad Residence – is set to permanently disappear from the market as the airlines CEO confirmed that their Airbus A380’s will remain parked permanently.

With the A380’s gone Etihad’s most illustrious product would be gone and the carrier now falls back on their remaining fleet (some of which features regular First Class Apartments) to maintain operations.

It’s well known that Etihad isn’t alone with their decision to abandon it’s A380 fleet. In fact most carriers who have the aircraft in their fleet already decided it’s time to park it permanently.

Some exceptions to that are Emirates and ANA as they likely have the capacity of filling up the aircraft to capacity on certain routes.

The unwelcome news about Etihad came this week in an interview published by The National News with Etihas Airways CEO Tony Douglas.

… Mr Douglas said he does not expect air travel to return to pre-crisis levels until 2023.

“We’re expecting 2021 to be a very difficult year, we’re expecting 2022 to be a transition year and we’re expecting 2023 sees us slowly getting back to pre-Covid passenger numbers,” he said. “We’ve budgeted for 2021 to be a continuation of many of the challenges we faced last year.”

Etihad’s core operating loss in 2020 more than doubled to $1.7 billion from the previous year, as passenger traffic fell 76 per cent due to the pandemic, which also pushed global peers such as Qantas and British Airways-parent IAG into the red.

Full-year passenger revenue dropped 74 per cent to $1.2bn as the airline carried 4.2 million people, down from 17.4 million in 2019, the carrier said on Thursday. That was due to lower demand, fewer scheduled flights and the UAE’s suspension of passenger services in late March to curb the spread of the virus, Etihad said.

Etihad’s full-year loss “could have easily doubled” had it not been for the airline’s ongoing five-year turnaround plan, which it accelerated due to the pandemic, Mr Douglas said. …

Besides its 40 Dreamliners, Etihad will deploy its 12 Airbus A350s but not in 2021 or 2022, the chief executive said.

“It’s one of those where you segment how you fight your way through 2021-2022 and we’d do that with the 787s predominantly,” he said.

Of its 10 Airbus A380 superjumbos, Mr Douglas said: “We have now taken the strategic decision to park the A380s, I’m sure it’s very likely that we won’t see them operating with Etihad again.”

Etihad has Boeing 777-9s on order, with the US manufacturer delaying the plane’s debut to 2023. Mr Douglas said the date for Etihad deliveries is a question for Boeing. …

Etihad had indeed started a reshuffle of aircraft and reduced capacity even prior to the Covid-19 pandemic which also included a severe reduction of staff. Especially many cabin crew members lost their job. As it turned out starting this company overhaul early was a blessing for Etihad.

The airline’s total workforce shrank 33 per cent to a total of 13,587 employees by the end of 2020, compared to 20,369 in 2019. Another wave of job cuts is in progress for 2021 according to the article. By the time these reductions are completed Etihad will be significantly smaller in size. Compare that to Emirates that employs 105,000 people and you could almost call Etihad a Boutique Airline.

Let’s not forget that Etihad has been in trouble way before Covid-19 came onto the scene. Back in 2017 Etihad incurred a giant billion dollar deficit for the second year in a row, reporting a $1.52 Billion loss for the financial year 2017.

It has always been questionable if Etihad really had the volume to fill A380 aircraft or if the purchase and operation of this plane type, including the hyped Residences were more of a vanity project for the sheiks.

Conclusion

Etihad is a solid airline whose management has improved over the years after they started to look at the actual viability of the company, moving away from being a pet project for the rulers of Abu Dhabi.

The A380 remains my favorite aircraft and I’m sad to see it go but it was never a good fit for Etihad which doesn’t have the overall passenger volume (especially feeders) to move numbers like Emirates. The Residences were an elusive product, prohibitively expensive to book for cash (except on the short route to/from India) and impossible to book with miles.

Etihad will continue to offer First Class on other aircraft types so for those who have come to like EY over the years there are still options in the years to come. In 2023 the carrier will also implement the Airbus A350 into the fleet.

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