our
journey
Annual Report 2011
Travelling well, they say, is more important than arriving.
At Etihad Airways, our journey defines us.
Etihad Airways Annual Report 2011
3
Contents
President and Chief Executive Officer’s report 6 | Into the black 8 | airberlin: an ideal partnership 12
Etihad Airways and Abu Dhabi 14 | A stellar year of achievements 16 | Route map 18 | The story so far 20
Making the numbers work 22 | Aircraft 24 | Fleet 26 | Network 28 | Guest Experience 30 | Etihad Cargo 32
Operations 34 | Safety 37 | Etihad Guest 38 | Sales 40 | Information technology 42 | Partnerships and alliances 44
Marketing 46 | Social responsibility and sustainability 48 | People and performance 50 | Corporate Governance 55
Etihad Airways Executive 56 | Management 58 | Awards 60
CONTENTS
President and Chief Executive Officer’s report 8 | Into the black 10 | airberlin: an ideal partnership 14 | Etihad Airways and Abu Dhabi 16
A year of stellar achievements 18 | Route map 20 | The story so far 22 | Making the numbers work 24 | Aircraft 26 | Fleet 28 | Network 30
Guest Experience 32 | Etihad Cargo 34 | Operations 36 | Safety 39 | Etihad Guest 40 | Sales 42 | Information technology 44
Partnerships and alliances 46 | Joint Ventures 48 | Marketing 50 | Social responsibility and sustainability 52 | People and performance 54
Corporate Governance 59 | Etihad Airways Executive 60 | Etihad Airways Management 62 | Awards 64
4
Etihad Airways Annual Report 2011
Etihad Airways Annual Report 2011
5
Etihad Airways
Board of Directors
HH Sheikh Hamed bin Zayed Al Nahyan (Chairman)
HH Sheikh Khaled bin Zayed Al Nahyan (Vice Chairman)
HE Mohammed Mubarak Fadel Al Mazrouei
HE Ahmed Ali Al Sayegh
HE Mubarak Hamad Al Muhairi
HE Hamad Abdullah Al Shamsi
HE Khalifa Sultan Al Suwaidi
HH Sheikh Khalifa bin Zayed Al Nahyan
President of the UAE and the Ruler of Abu Dhabi
6
Etihad Airways Annual Report 2011
HH General Sheikh Mohamed bin Zayed Al Nahyan
Crown Prince of Abu Dhabi and Deputy Supreme
Commander of the Armed Forces of the UAE
Etihad Airways Annual Report 2011
7
CEO REPORT
President and Chief Executive Officer’s report
2011 was the most momentous year in
the short history of Etihad Airways.
Against a backdrop of the global
financial crisis, regional instability,
continued high oil prices and natural
disasters, our milestone achievement
of profitability ranks as one of the best
performances of any airline in the
world.
Our target in 2011 was to break
even. Thanks to the dedication and
commitment of the entire Etihad
Airways family, we surpassed that goal.
We delivered earnings before interest
and tax (EBIT) of US$137 million, on
revenues up 36 per cent to US$4.1
billion. We carried 8.3 million
passengers, up 17 per cent on 2010,
with an average seat factor of 75.8 per
cent, nearly two percentage points
higher than the previous year. All parts
of the business contributed to our
success. Cargo revenues were up 25
per cent to US$651 million on tonnage
up nearly 18 per cent.
Safety remained our highest priority,
and our focus on providing the best
customer service continued – for
example, leading the way with
innovative developments such as our
First Class Chefs.
During the year we formed a new
Guest Experience department to focus
on the entire journey of our customers
8
Etihad Airways Annual Report 2011
like never before. We will continue to
innovate in 2012 through investment
in our product, on the ground and in
the air.
The new benchmarks we have set
in modern air travel have not gone
unnoticed. We were proud to be
awarded the title of World’s Leading
Airline for the third year in succession,
and we were also awarded Best First
Class and Best First Class Catering by
Skytrax.
We launched five new passenger
destinations in 2011 – the Maldives,
the Seychelles, Chengdu, Bangalore
and Düsseldorf – while also investing
in our 11 cargo-only cities. Already
in 2012, we have launched flights to
Tripoli, Shanghai and Nairobi, with
Lagos and Basra to follow, and new
services to Washington DC announced.
In 2011, we increased the frequency
of more than 13 routes and we will
continue this approach, with daily
frequencies our minimum target and
double daily or more where demand
allows. During 2011, we introduced
seven new aircraft, boosting our fleet
to 64, and in 2012 we expect to add
another seven aircraft.
We published the first-ever
Etihad Airways Corporate Social
Responsibility Report in 2011, detailing
our policies and activities to date
in relation to our environmental,
community and philanthropic
activities. This will become an annual
report, charting our progress towards
delivering best-in-class performance in
this area.
The 2011 results delivered the mandate
set by our shareholder, the Government
of Abu Dhabi, to be safe, profitable
and create the best airline in the
world, while fulfilling our role as a key
enabler in the transformation of Abu
Dhabi into a world-class trade and
tourism centre.
While impressive, these results are
now consigned to the pages of history.
Today’s achievements are no guarantee
of future success and our focus is now
on reaching greater heights.
Sustained profitability is our new
challenge and one that requires a new
mindset. In 2012 we have once again
set new targets for strong growth, with
a passenger traffic target of 10 million
and a corresponding increase in profits.
We know it will not be easy – aviation
is not an easy industry. In 2011,
we contended with the terrible
earthquake and tsunami in Japan,
global economic uncertainty, regional
instability in the Middle East and
high oil prices, averaging US$110.83
per barrel over the course of the
year – all of which were outside our
control. As always, we will expect the
unexpected, and in 2012 be ready to
react to the unforeseen events that will
undoubtedly arise.
While many factors will remain
outside our direct control, there is
much we can influence and a key
area in 2012 will be our controllable
costs. Our record in this area to date
is notable. Costs per available seat
kilometre, excluding fuel, have fallen
by 16 per cent over the last two years,
representing annual savings of more
than US$187 million. Ongoing cost
control will continue to be a key
feature of how we do business and
more efficiencies have been identified
for 2012 and beyond.
Alongside this, much work will take
place to develop and strengthen our
strategic partnerships and investments
to deliver increasing returns. Our
strategic partnership with Virgin
Australia – which took root in 2011
and is proving very successful – and
partnership and investments with
airberlin and Air Seychelles, will play
a very important part in sustaining
profitability.
Through airberlin, Germany’s second
largest airline and the sixth largest
in Europe, we have instant access
to the largest European market of
80 million people in the strongest
economy in Europe. This adds 157
destinations and gives us access to
35 million new passengers. This deal
will be our most important catalyst for
Given the challenges faced by the industry, our combination of
revenue growth and entry into profitability must be one of the best
results of any airline in 2011.”
President and Chief Executive Officer, James Hogan
growth in 2012 and will have a major
impact on revenues, with an expected
contribution of some US$50 million.
These partnerships are game-changing
moves. In 2012, partnerships and
alliances are expected to produce
just under US$500 million in annual
revenues. This is a massive contribution
to our business, which is why we
will continue to expand and develop
such partnerships, strengthening our
relationship with our 35 codeshare
partners and giving sensible thought
to new opportunities that arise and
are right for the business to extend our
competitive offering for the benefit of
our customers.
Internally, we will continue to reengineer our business, such as through
our deal with Sabre Airline Solutions,
the aviation computer technology
provider, to introduce revolutionary
change through cutting edge,
integrated software systems across the
company.
Etihad Airways staff grew by 15 per
cent in 2011, to more than 9,000
people from 128 different nationalities.
We continue to focus on the
development of an Emirati workforce,
which now represents 18 per cent of
Head Office staff, in addition to more
than 1,000 participating in cadet pilot,
engineer, contact centre agent and
graduate manager training programs.
As always, continued success will be
driven by our people and depend on
collective and individual focus, energy,
and commitment to our customers and
each other. We will also continue to
instil the values of respect, consistency
and discipline throughout our
workforce.
The year ahead will be about
navigating the challenges that come
our way, while cementing our
reputation as a successful global
business, one that delivers increasing
returns to its shareholder.
Finally, I thank our shareholder,
the Government of Abu Dhabi. The
Government has set Etihad Airways
ambitious targets and we embrace
them, knowing that in all we do we
can count on the strong support of our
Chairman and the Board of Directors in
the implementation of our strategy.
James Hogan
President and Chief Executive Officer
Etihad Airways Annual Report 2011
9
US$4.1 billion
US$29.6 billion
US$651 million
8.3 million
38.7 billion
51 billion
75.8 per cent
64 aircraft
9,038
36%
23.9%
25.7%
17%
15.8%
13%
1.8%
12.3%
15.1%
TOTAL REVENUE
PASSENGER REVENUE
CARGO REVENUE
PASSENGER NUMBERS
REVENUE PASSENGER
KILOMETRES
AVAILABLE SEAT
KILOMETRES
SEAT FACTOR
FLEET SIZE
NUMBER OF
EMPLOYEES
Into the black
Etihad Airways’ mandate:
✓ Safe airline
✓ Best-in-class airline
✓ Profitable airline
While we deliver an
exceptional full service
product, our management
culture is that of a low cost
airline. We have a forensic
focus on cost control in
every area of the business,
aggressively targeting
operational efficiencies.”
President and Chief Executive Officer,
James Hogan
• Full year EBIT of US$137 million
• EBITDAR of US$648 million
• Net profit of US$14 million
10
Etihad Airways Annual Report 2011
Etihad Airways Annual Report 2011
11
KPMG Lower Gulf Limited
Abu Dhabi Branch
PO Box 7613
Abu Dhabi
United Arab Emirates
Into the black
Independent auditor’s report
2011 was the year Etihad Airways became profitable.
The result is testament to the efficacy of financial
strategies put in place as long ago as 2006 by the
management team.
It also follows the introduction in 2010 of an enriched
business model designed to build on the organic depth
and scale achieved over the airline’s first seven years of
rapid growth.
2011 saw significant progress in each of the four areas
of focus – passenger air transport, distribution, air cargo
operations and Abu Dhabi hub operations.
In 2011 Cargo enjoyed spectacular growth. A record
310,000 tonnes was carried, 46,875 tonnes or almost
18 per cent more than in 2010. Strongest growth was
seen out of Europe as exports from markets such as
Germany and Italy held firm during a challenging back
half of the year.
Fifteen per cent was contributed by airline alliances.
For example, 2011 marked the first full year of Etihad
Airways’ strategic partnership with Virgin Australia. The
revenue contributed by this alliance was 700 per cent
above what had been achieved with Etihad Airways’
previous Australian airline partner.
The 29.21 per cent equity investment in airberlin is
expected to generate extra revenue for Etihad Airways
of up to US$50 million in the first year alone, while
the strategic long-term investment in Air Seychelles –
combined with a commercial agreement and five-year
management contract – will underpin that carrier’s
return to profitability.
Cost reduction was a key factor in the airline’s financial
performance. Costs per available seat kilometre (CASK),
12
Etihad Airways Annual Report 2011
excluding fuel, were cut by 4.6 per cent on 2010
figures, and by 16.6 per cent since 2009, representing
an annual saving of US$187 million.
Etihad Airways issued three major Requests for
Proposal (RFPs) in 2011 to secure financing for two
aircraft and one spare engine. The RFPs received
significant interest and were oversubscribed by up to
five times the funding requirement. Etihad Airways
raised US$767 million in aircraft delivery financing
and US$316 million in spare engines sale and
leaseback financing, amounting to a total of US$1,083
million raised in 2011. Of this, approximately US$728
million was raised as export credit financing for the
Boeing B777 and Airbus A330 passenger and freighter
deliveries, and US$39 million was raised in the
commercial market for an Airbus A320 delivery. The
spare engine financing was raised from two leasing
companies in the commercial market. Three new lending and leasing partners were
introduced in 2011– TD Securities, ELFC, and SANAD.
The cost of funding from external markets remained
very competitive in 2011, with all transactions resulting
in an all-in cost of funding below three per cent.
Etihad Airways’ industry-leading fuel hedging program
saw the airline purchase jet fuel at an average cost of
US$100.96 a barrel in 2011 against a market average
price of US$127.70 per barrel.
The airline’s rolling three-year program involving active
hedges with 24 international financial institutions
builds certainty into the price of fuel, which is the
airline’s largest and most volatile expense.
In 2012, Etihad Airways is again aiming for strong
growth, with a passenger traffic target of 10 million and
a corresponding increase in profits.
The airline will continue to invest in network, aircraft
and infrastructure in 2012, expanding in Asia and
Africa, adding seven aircraft to the fleet and looking for
opportunities to make profitable alliances in 2012.
Focus areas
Actions implemented
Passenger air transport
• Equity acquisitions in Air Berlin (29%) and Air Seychelles (40%)
• 35 codeshare partnerships (2006:two)
Distribution
• Joint venture with BCD to create Hala Travel Management
Air cargo operations
Abu Dhabi hub operations
• Joint venture with Linfox/Armaguard for carriage of precious cargo
and cash management
• Management of cargo handling and warehousing at Abu Dhabi hub
• Management of check in and ramp operations for Etihad Airways
and other airlines
• Management of ADIFC (catering company)
Report on consolidated financial statements
We have audited the accompanying financial
statements of Etihad Airways PJSC (“Etihad” or
“the company”), and its subsidiaries (collectively
referred to as “the Group”), which comprise the
consolidated statement of financial position as at 31
December 2011, and the consolidated statements of
comprehensive income, changes in equity and cash
flows for the year then ended, and notes, comprising a
summary of significant accounting policies and other
explanatory information.
Management’s responsibility for the consolidated
financial statements
Management is responsible for the preparation and
fair presentation of these consolidated financial
statements in accordance with International
Financial Reporting Standards, the relevant Articles
of Association of the Company and the applicable
provisions of UAE Federal Law No. (8) of 1984
(as amended), and for such internal control as
management determines necessary to ensure the
preparation of consolidated financial statements that
are free from material misstatement, whether due to
fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these
consolidated financial statements based on our
audit. We conducted our audit in accordance with
International Standards on Auditing. Those standards
require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable
assurance whether the consolidated financial
statements are free from material misstatement.
An audit involves performing procedures to obtain
audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures
selected depend on our judgement, including the
assessment of the risks of material misstatement of
the consolidated financial statements, whether due
to fraud or error. In making those risk assessments,
we consider internal control relevant to the entity’s
preparation and fair presentation of the consolidated
financial statements in order to design audit
procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. An
audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness
of accounting estimates made by management, as
well as evaluating the overall presentation of the
consolidated financial statements.
We believe that the audit we have obtained is
sufficient and appropriate to provide a basis for our
audit opinion.
Standards and comply, where appropriate, with
the Articles of Association of the Company and the
applicable provisions of UAE Federal Law No. (8) of
1984 (as amended).
Report on other requirements
As required by the Company’s Articles of Association,
we further confirm that we have obtained all the
information and explanations necessary for our audit,
that proper financial records have been kept by the
Company, and that physical counts of inventories
were carried out by management in accordance
with established principles. We are not aware of any
violation of the Company’s Articles of Association
having occurred during the year ended 31 December
2011, which may have had a material adverse effect
on the business of the Company or on its financial
position.
Vijendra Nath Malhotra
31 January 2012
KPMG
Registration No. 48
Opinion
In our opinion, the consolidated financial statements
present fairly, in all material respects, the consolidated
financial position of the Group as at 31 December
2011, and its consolidated financial performance and
its consolidated cash flows for the year then ended
in accordance with International Financial Reporting
Etihad Airways Annual Report 2011
13
airberlin: an ideal partnership
Etihad Airways’ move on December 19 to become
airberlin’s single largest shareholder was a gamechanging move that opened access to a new market
of 35 million passengers.
Etihad Airways had already taken a 2.99 per cent
stake in airberlin – Europe’s sixth largest airline and
Germany’s second – and by increasing its stake to
29.2 per cent, signalled the start of a strategic longterm partnership linking airberlin’s European hubs
with Etihad Airways’ home base in Abu Dhabi.
The year-one revenue prediction arising from
the partnership is in the order of US$50 million
for each airline, with revenues expected to grow
considerably as the partnership matures. Unlocking
efficiencies is also a key focus for the two airlines.
The airberlin deal was Etihad Airways’ first equity
partnership in a well-developed and highly
successful partnership strategy built over the past
six years. This strategy has enabled Etihad Airways
to stretch its network in a way that would not have
been viable for such a young airline, despite its own
rapid organic growth.
Under the terms of the agreement, Etihad Airways
will provide five-year financing facilities of up
to US$255 million to support airberlin’s fleet
development and future network growth.
14
Etihad Airways Annual Report 2011
Under the partnership, which received approval
from German and Austrian regulatory authorities on
January 26, 2012:
»» airberlin commenced operating four A330-200 flights a week between Berlin and Abu Dhabi on January 15, 2012, and moved to a daily
service on March 25, 2012
»» European travellers have access to 29 flights a week to and through Abu Dhabi from four German hubs – Berlin, Munich, Frankfurt and Düsseldorf – with a plan to increase to 42 flights from mid-April 2012
»» airberlin launched a new daily route between Abu Dhabi and Phuket on March 25, 2012
»» airberlin is initially codesharing on Etihad Airways flights from Düsseldorf, Frankfurt and
Munich to Abu Dhabi and on Etihad Airways
flights from Abu Dhabi to Bangkok, Malé
(Maldives) and Singapore, with other destinations
to come
»» Etihad Airways is codesharing on airberlin group flights to Basel, Berlin, Catania, Copenhagen, Hamburg, Hannover, Helsinki, Milan, Rome, Stuttgart, Venice, Vienna and Zurich, with others to come
»» Etihad Guest and topbonus, the airlines’ frequent flyer programs, have been integrated, enabling passengers on both airlines to ‘earn and burn’ on each other’s flights and offering reciprocal benefits – including status earning – to top tier members.
Etihad Airways acquisition of the 29.2 percent stake
in airberlin was a game-changing move that opened
access to a huge new market of 35 million passengers.
The year-one revenue prediction arising from the partnership
is in the order of US$50 million for each airline, with revenues
expected to grow considerably as the partnership matures.
Etihad Airways Annual Report 2011
15
Etihad Airways and Abu Dhabi
According to the latest study, completed in April
2011 by leading UK think tank Oxford Economics,
Etihad Airways plays a crucial role in supporting
and driving economic growth in the UAE.
The research used the standard methodology for
economic impact appraisals, and was based on
data from the International Air Transport Association
(IATA), the Air Transport Action Group (ATAG),
EUROCONTROL, the UK aviation industry and the
Civil Aviation Authority of Singapore (CAAS).
Economic contribution is classified into four key
areas: direct (within Etihad Airways), indirect
(suppliers to Etihad Airways), induced (spending
of direct and indirect employees) and catalytic
(impacts on other industries).
Etihad Airways’ total economic contribution
to Abu Dhabi’s GDP is on track to increase
by 76 per cent to US$10.743 billion by 2015,
helping to support 162,000 jobs in the Emirate.
16
Etihad Airways Annual Report 2011
Direct Economic Contribution: The airline
contributed US$1.46 billion or 2.1 per cent of Abu
Dhabi’s non-oil GDP (0.8 per cent of total GDP) in
2011.
Indirect Economic Contribution: Etihad Airways
made an indirect economic contribution of US$830
million and supported an additional 15,000 jobs
in 2011 through fuel purchases, maintenance and
repair, airport rental and landing fees, marketing,
advertising, IT ventures and communications.
Catalytic Economic Contribution: Etihad Airways
played an important role in improving air links
between Abu Dhabi and the rest of the global
economy, and the airline’s expanding network was
a key factor in encouraging businesses to invest in
the Emirate and the UAE. These activities provided
a catalytic economic contribution of nearly US$4
billion, representing 5.3 per cent of Abu Dhabi’s nonoil GDP or 2.1 per cent of total GDP, and supported
nearly 104,000 jobs.
Etihad Airways was also a key contributor to the
development and growth of tourism in the UAE.
In 2011 the airline carried 8.3 million passengers
through its hub in Abu Dhabi. In 2012 this figure is
set to increase to 10 million passengers.
Based on the airline’s current growth projections,
Etihad Airways’ total economic contribution to Abu
Dhabi’s GDP is on track to increase by 76 per cent
to US$10.743 billion by 2015, helping to support
162,000 jobs in the Emirate.
8
6
2014
2013
2012
10
2011
Induced Economic Contribution: An induced
GDP contribution of US$760 million and 13,839
additional jobs can be attributed to money spent
during 2011 by people working for Etihad Airways
and its suppliers.
2010
Aviation is a critical cluster industry within the Abu
Dhabi Government’s 2030 Plan on the basis that
a successful airline and airport will promote freemarket commercial activity in sufficient volume to
underpin a diverse economy, while attracting further
investment.
2015
US$ billion
12
4
2
0
Etihad’s overall contribution to
economic activity in Abu Dhabi
Source: Oxford Economics and Etihad Airways
Direct
Induced
Indirect
Catalytic
Etihad
Airways
Airport
International
Business
ABU DHABI
2030 PLAN
Transport
Infrastructure
Tourism
Infrastructure
Etihad Airways Annual Report 2011
17
A year of stellar achievements
AWARDS
ENVIRONMENT
IFE &
CONNECTIVITY
From profitability to a landmark deal with airberlin and a 10-year
sponsorship deal with Manchester City Football Club, in 2011 Etihad
Airways demonstrated to the world the scale of its ambition.
TECHNOLOGY
EMIRATISATION
The number of UAE nationals
in the company jumped to
18 per cent – a 70 per cent
increase – in a year that saw
the first female Emirati pilot
qualify as a First Officer
and the first-ever all-female
Emirati contact centre open
in Al Ain.
CARGO
AIRBERLIN
PROFIT
Etihad Airways recorded its
first ever full year net profit
in 2011 of US$14 million,
beating its break-even goal.
A full year EBIT of US$137
million was recorded on
revenues up 36 per cent to
US$4.1 billion.
Etihad Airways’ first equity
investment was a 29.2
per cent stake in Europe’s
sixth largest airline, giving
overnight access to 35
million new passengers
and expanding the airlines’
combined networks to 239
destinations.
MANCHESTER
CITY FOOTBALL
CLUB
A 10-year partnership deal
was signed with the iconic
English football club and
includes naming rights
for the club’s stadium
and campus, as well as
an extension of the shirt
sponsorship.
2009
2010
2011
1,929
2,960
Passenger Revenue
(US$m)
18
Etihad Airways Annual Report 2011
NETWORK
Five new routes were
launched – Bangalore, the
Maldives, the Seychelles,
Chengdu and Düsseldorf –
and five announced for 2012
– Tripoli, Shanghai, Lagos,
Basra and Nairobi.
2009
2,390
FLEET
Eleven more B787-9
Dreamliners ordered – the
fleet of 41 will make Etihad
Airways the largest operator
of this aircraft type in the
world.
322
2009
518
2010
Cargo Revenue
(US$m)
SOCIAL MEDIA
Etihad Airways’ Facebook
page was launched in the
first quarter of 2011 and
by year-end had more than
60,000 fans.
Etihad Airways was named
World’s Leading Airline in
the prestigious World Travel
Awards for the third year in
succession.
A record 310,000 tonnes cargo
were carried, the almost 18 per
cent annual increase continuing
the spectacular growth of this
key revenue generating division.
2.3
3.0
2010
651
2011
A deal worth more than
US$1 billion was signed
with Sabre Airline Solutions,
the aviation computer
technology provider,
enabling revolutionary
change through the
introduction of cutting edge,
integrated software systems
across the company, affecting
almost every facet of the
business.
A 10-year deal, valued at
more than US$1 billion,
was signed with Panasonic
Avionics Corporation
to provide in-flight
entertainment systems
and in-flight connectivity,
including broadband Internet
and live TV, for the airline’s
entire long-haul fleet of wide
body aircraft.
Etihad Airways reduced carbon
emissions per passenger kilometre
by five per cent compared
to 2010 – with an overall
improvement of 17 per cent
since 2006 – through initiatives
such as lighter cargo containers,
modification of selected engines
and involvement in an industrywide program of ‘green flights’
identifying key areas for fuel and
emissions saving.
2011
4.1
Total Revenue
(US$b)
Etihad Airways Annual Report 2011
19
Route map
Helsinki
Oslo
Inverness
Stockholm
Gothenburg
Aberdeen
Edinburgh
Copenhagen
Londonderry Belfast
Isle of Mann
Leeds
St. Petersburg
Hamburg
Hanover
Manchester
Dublin
Warsaw
Nottingham Amsterdam Berlin
Birmingham
London London Stansted
Düsseldorf
Southampton
Exeter
Brussels
Frankfurt Prague
Jersey
Kosice
Stuttgart
Paris
Munich
Vienna
Salzburg
Budapest
Basel
ZurichInnsbruck Graz
Geneva
Lyon Milan
Toulouse
Marseille
Venice
Belgrade
Barcelona
Madrid
Palma de Mallorca
Rome
Moscow
Dublin
Seattle
Sofia
Tirana
Thessaloniki
Istanbul
Athens
Malaga
Europe Network
Catania
Malta
Rhodes
Ottawa
Minneapolis
La Crosse
Toronto
MadisonMilwaukee Rochester
Syracuse
Sioux City
DubuqueChicago
Boston
Westchester
Buffalo
Waterloo
Detroit Cleveland
Hartford
Des Moines Moline Toledo
New York
Omaha Bloomington Champaign Newark
Pittsburgh NY - La Guardia
Salt Lake City
Indianapolis Harrisburg
Philadelphia
Denver
Louisville
Columbus Baltimore
Saint Louis
Covington Washington
San Francisco
Evansville Lexington
Tulsa
Nashville
Las Vegas
Oklahoma NW Arkansas
Knoxville
Raleigh (Durham)
Memphis
Little Rock
Charlotte Douglas
Los Angeles
Huntsville
Phoenix
Atlanta
Dallas
San Diego
Tucson
Wilmington
El Paso
Austin
San Antonio Houston New Orleans
Orlando
Tampa
Fort Myers
Miami
Kazan
Minsk
Düsseldorf
London
Brussels
Prague
Frankfurt
Paris
Munich
Vancouver
Bucharest
Manchester
Samara
Astana
Kiev
Geneva
Milan
Krasnodar
Almaty
Porto
Barcelona
Madrid
Lisbon
Faro
Tangiers
Fez
Beijing
Athens
Erbil
Nador
Oujda
Casablanca
Funchal
Errachidia
Marrakech
Ouarzazate
Agadir
Tripoli
Larnaca
Alexandria
Cairo
Peshawar
Islamabad
Lahore
Beirut
Baghdad
Damascus
Amman
Basrah
Kuwait
Delhi
Muscat
Darwin
Karratha
Newman
Lagos
Etihad Destinations
Townsville
Proserpine Hamilton Island
Mackay
Rockhampton
Gladstone
Ayers Rock (Uluru)
Hervey Bay
Sunshine Coast
Codeshare Partner Destinations
Etihad Future Destinations
Adelaide
Yangon
Manila
Bangkok
Trat
Phnom Penh
Ho Chi Minh City
Koh Samui
Krabi
Phuket
Langkawi
Penang
Kuala Lumpur
Praslin
Kota Kinabalu
Kuantan
Singapore
Seychelles
Hong Kong
Hanoi
Luang Prabang
Chiang Mai
Kuching
Jakarta
Denpasar Bali
Gold Coast
Ballina
Coffs Harbour
Port Macquarie
Newcastle
Sydney
Canberra
Albury
Melbourne
Launceston
Hobart
Australasia Network
20
Okinawa
Dhaka
Johor Bahru
Nairobi
Brisbane
Perth
Karachi
Bengaluru
Chennai
Kozhikode
Kochi
Trivandrum
Colombo
Malé
Ouagadougou
Cotonou
Accra
Cairns
Broome
Port Hedland
Bamako
San'a
Shanghai
Chengdu
Tokyo
Nagoya
Osaka
Fukuoka
Matsuyama
Kumamoto
Kagoshima
Kathmandu
Mumbai
Hyderabad
Nouakchott
Khartoum
Sendai
Niigata
Seoul
Tehran
Dammam Bahrain
Doha
Riyadh
Abu Dhabi
Jeddah
Dakar
Banjul
Sapporo
Istanbul
Etihad Airways Annual Report 2011
Auckland
Hamilton
Rotorua
Wellington
Christchurch
Queenstown
Dunedin
Johannesburg
Brisbane
Sydney
Melbourne
Auckland
Etihad Airways Annual Report 2011
21
We have delivered on our mandate and the business plan we agreed with our shareholder. We
have a proven track record, and today, Etihad Airways enjoys the confidence of the banking and
financial sector globally and has a high measure of credibility in the business community.”
The story so far
2008
2009
2010
2011
Passengers (million)
6
6.3
7.1
8.3
Fleet by year (passenger & cargo)
42
53
57
64
Total destinations including Abu Dhabi
59
69
79
81
Load factor
75%
74%
74%
75.8%
On time performance
79%
87%
86%
82.6%
Etihad Guest members
500,000
750,000
1,000,000
1,300,000
Etihad Guest accrual partners
30
43
65
67
Etihad Guest redemption partners
69
107
215
273
Codeshare partners
10
19
28
35
7,058
7,828
7,855
9,038
AED 9.1
AED 8.4
AED 10.9
AED 15
(US$ 2.5)
(US$ 2.5)
(US$ 2.95)
(US$ 4.1)
76%
66%
82%
80%
Employees
Revenues (billion)
Fuel hedged
22
James Rigney, Chief Financial Officer
Etihad Airways Annual Report 2011
Etihad Airways Annual Report 2011
23
Making the numbers work
Guests carried
8.3 million
Seat factor
75.8%
New aircraft
7
Total codeshare
agreements
35
Total annual
cargo carried
310,000 tonnes
Available seat
kilometres
Passenger fleet
51 billion
57
Number of Etihad
Guest accrual partners
Revenue passenger
kilometres
67
Annual passenger
revenue
$2.96bn
Etihad Airways’ stake in
airberlin
29.2%
Average cargo
carried in a month
25,000 tonnes
Coaches a day from
Dubai to Abu Dhabi
22
38.7 billion
Staff nationalities
128
Top 5 staff
nationalities
India (962)
UAE (819)
Philippines (710)
UK (624)
Australia (237)
5 new destinations
Bangalore
Maldives
Seychelles
Chengdu
Düsseldorf
24
Etihad Airways Annual Report 2011
Cargo fleet
7
Top 10 routes by
passenger volume
Bangkok
(500,589)
London
(478,821)
Jeddah
(289,439)
Sydney
(269,185)
Frankfurt
(237,451)
Paris
(228,425)
Manchester
(222,465)
Doha
(215,137)
Dublin
(214,733)
Many congratulations to Etihad Airways on this year’s results. It
is wonderful to have been part of the Etihad Airways story, from
inception in 2003 through to world stage as a premier carrier.
We look forward to your future success and wish you great
fortune in 2012 and beyond.”
Richard S Oliver, Managing Director, Head of Global Banking, Abu Dhabi HSBC Bank
Etihad Airways Annual Report 2011
25
Aircraft the right mix
Current fleet at 31 December 2011
Aircraft on order at 31 December 2011*
8x B777-300ER
10x A380
11x A340-500/600
22x A330-200/300
12x B777
16x A319/320
19x A350
1x B777-200F
41x B787
2x MD11F
20x A320
2x A330-200F
* Flexibility to increase deliveries with 85
options and purchase rights.
2x A300-600F
26
Etihad Airways Annual Report 2011
Etihad Airways Annual Report 2011
27
Fleet the right size
»»Increasing the Boeing B777-300ER order by three aircraft to be delivered in 2013
»»Adding further Boeing B787-9 Dreamliner capacity, bringing to 41 the total number of this aircraft type to be delivered between 2014 and 2019, which will result in Etihad Airways being the single largest operator of this model in the world
»»Tripling the order for Boeing B777-200F aircraft to join the fleet by the second quarter of 2013
28
Etihad Airways Annual Report 2011
64
57
52
2011
2010
»»Reconfiguration of eight Airbus A330-200 aircraft from three- to two-class, with consistent product and seat count
»»Reconfiguration of three Airbus A330-300 aircraft, resulting in an additional 28 seats by adjusting cabin configurations to match demand.
Total Aircraft
Departures
62,735
»»Upgrade of the Pearl Business Class cabin on nine narrow-body aircraft, including the installation of new seats
Work commenced for the entry into service of
the Airbus A380 and Boeing B787, which will be
delivered in 2014.
In 2011, progress included:
»»defining the onboard product and seat count
»»detailing specifications for the aircraft
»»managing onboard weight
»»infrastructure technology readiness
2011
»»Altering delivery profiles to add three Airbus A320 aircraft in 2012 by advancing two aircraft from 2014 and taking an additional leased aircraft
»»Roll out of the new Diamond First Class cabin, incorporating suites and a large changing room on nine Airbus A340 aircraft
57,534
Etihad continually evaluates opportunities to
optimise aircraft deliveries to meet forecast
passenger demand and network requirements.
During 2011, agreements were put in place with
aircraft manufacturers to protect the growth of
the airline over the short- and long-term. These
included:
The following programs were completed during the
year:
2010
Etihad Airways continually evaluates opportunities
to optimise aircraft deliveries to meet forecast
passenger demand and network requirements.
In 2011, Etihad Airways concluded an extensive
two-year reconfiguration program in which the
majority of the existing fleet was upgraded to Etihad
Airways’ exacting standard of onboard product
while optimising seat count to match demand on
the routes served by each aircraft type.
2009
Seven new aircraft are due for delivery in 2012,
with a further 95 on firm order to meet the airline’s
needs through to 2020. Out of the total firm order
of 100, five have already entered service.
Total Fleet
49,064
This brought the fleet to a total of 64 aircraft as at
December 31, 2011.
Agreements with the major aircraft manufacturers
were restructured to retain flexibility for future
capacity growth and coverage for any further delays
in the new aircraft programs.
2009
During 2011, Etihad Airways took delivery of seven
new aircraft:
»»Three Airbus A330-300 in a three-class layout
»»Two Boeing B777-300ER in a two-class layout
»»One Airbus A320-200 in a two-class layout
»»The first Boeing B777-200F for the cargo division
Weight management
initiatives
Etihad Airways takes weight management on its aircraft
seriously, with the aim of reducing fuel costs and aircraft
emissions. A project group was formed in 2011, tasked
with identifying and implementing initiatives to reduce
weight and lower fuel burn and the impact on the
environment. Savings have already been made through
the use of lighter weight composite materials in cargo
containers, catering equipment and magazines.
Etihad Airways Annual Report 2011
29
30
Etihad Airways Annual Report 2011
»»Lagos (six per week – from July 1, 2012)
Etihad Airways also planned additional frequencies
to a range of other destinations to be introduced in
2012, enabling it to increase the depth and breadth
of the network.
Other changes planned for 2012 include:
»»upgrading services to Jakarta (March) and Kuala Lumpur (April) to two-class Boeing B777-300ER aircraft;
»»deploying the first three-class B777-300ER on the London-Abu Dhabi route (July 2012); and
8,297
Passenger
Numbers (’000)
7,100
Seat Factor
(%)
6,276
2011
2010
»»adding a third daily Bangkok service (April 15,
2012).
2009
The combination of increased routes and
frequencies generated a 30 per cent year-on-year
increase in sub-four-hour connectivity over the Abu
Dhabi hub.
»»Basra (four flights per week – from April 15, 2012)
75.8%
Six new passenger aircraft in 2011 allowed
Etihad Airways to add five new destinations to the
network: Bangalore, Maldives, Seychelles, Chengdu
and Düsseldorf. An additional 36 frequencies to 12
existing destinations were also added. As part of its
European expansion at the beginning of summer
2011, 17 additional weekly frequencies were added
across five existing destinations – Paris, Geneva,
Milan, Brussels and Manchester.
»»Shanghai (daily – from April 15, 2012)
2011
The airline’s 10-year network plan was refreshed in
2011, detailing Etihad Airways’ growth through to
2020 to include 131 passenger destinations with a
fleet of over 150 aircraft.
»»Nairobi (daily – from April 1, 2012)
74.0%
Schedule planning is based on optimal connectivity
across the network and customer convenience,
with the important goal of maximising use of the
airline’s major assets – its aircraft – while working
within operational, environmental, political and
infrastructure constraints.
»»Tripoli (three per week – from January 17, 2012)
2010
When planning the development of the Etihad
Airways network, the airline takes into account
a range of indicators such as demand, potential
revenue and profitability, and analyses current and
new markets for the best capacity fit (aircraft size
and cabin configuration) to ensure each market will
contribute to airline profitability.
Significant expansion is planned into the emerging
markets of China, Africa and the Middle East
with the following new destinations added to the
network:
73.6%
Network Management generates optimal
commercial results by designing, implementing and
managing a customer-driven network and schedule.
2009
At December 31, 2011
»»81 destinations in 51 countries.
»»Available Seat Kilometres (ASKs) on the network grew to 51 billion, up 13 per cent on the previous year.
»»Revenue Passenger Kilometres (RPKs) grew to 38.7 billion, up 16 per cent on the previous year.
Network connecting the world
Etihad Airways Annual Report 2011
31
Guest Experience leading the world
a
In May 2011, the Product and Service department was
repositioned and renamed Guest Experience. More
than just a departmental name change, the move is a
strategic business change, reflecting Etihad Airways’
total commitment to caring for its customers at every
stage of their journey, and refocusing the airline’s
resources on the delivery of service at the very highest
standard.
Etihad Airways’ world-first Guest Response initiative
was launched in December 2011, based in the
airline’s round-the-clock Network Operations Centre.
Guest Response provides assistance and service
recovery to First and Business Class passengers and
premium-tier Etihad Guest members who are in ‘live
journey’, with real-time links to the Etihad Airways
global airport network that are particularly beneficial
during operational disruptions. The Guest Response
unit also provides ‘speed-dial’ support inflight to the
airline’s cabin crew, enabling on-the-spot service
recovery.
2011 saw considerable consolidation after several
changes to the Diamond First and Pearl Business Class
cabins in 2010, including a program to standardise
inflight processes, ensuring consistency of service
across all fleet and seat types.
Etihad Guest Experience frequently and regularly assesses the airline’s
performance in the eyes of its customers.
Participation in Airs@t – IATA’s independent quarterly benchmarking study of major airlines’
Business and Economy classes – continued in 2011, with positive results for Etihad Airways in
both classes. In addition, Etihad Airways launched its own Etihad Guest Experience Survey. The
first quarterly results, delivered in November 2011, showed strong performance in all cabins
while indicating areas for development in 2012.
32
Etihad Airways Annual Report 2011
Other key initiatives launched during the year
included:
»»A new premium cabin service on ultra short-haul flights in response to guest feedback to ensure faster delivery of drinks and appetisers
»»Fortnightly menu changes to ensure frequent guests experience variety
»»New amenity kits in Diamond First Class
»»‘Immaculate Etihad’ – a program to ensure a new level of cleanliness in all cabins
»»The innovative First Class Chef concept and introduction of the ‘Mezoon Grille’ cuisine, which continues to be rolled out across the First Class operation
»»A new recruitment and training program to strengthen the Guest Affairs team and offer world-
leading customer response times
Inflight entertainment is a crucial differentiator
between airlines, and Etihad Airways is committed
to providing the best, both in terms of content
and system performance and reliability. The new
Panasonic eX2 IFE system is incredibly popular with
customers and so far features on 16 aircraft, with rollout on a further 100 planned.
Inflight mobile phone and Internet connectivity
services were launched on two Airbus A330-300 and
one A320 aircraft towards the end of 2011 and further
deployment will continue to be a key area of focus in
2012 with 12 aircraft equipped by year end.
Etihad Airways invested in a rigorous research
program that was launched in September 2011. The
new research approach comprises four measures,
including the IATA airs@t survey, the Mindset survey,
the Etihad Guest Experience survey and a new Etihad
Airways Staff Travel survey.
On the ground, destinations offering Etihad Chauffeur
service to premium passengers increased to 27 and
the frequency of the free Etihad Express luxury coach
service between Abu Dhabi and Dubai increased to
22 trips per day.
1
2
The airline’s efforts to improve and refine the guest
experience will deepen and strengthen in 2012 as
Etihad Airways reinforces its drive to be a world leader
in this field with positive and exciting action.
1 October saw the introduction of Inflight
Chefs in Diamond First Class and the
launch of the signature ‘Mezoon Grille’
cuisine.
2 16 aircraft were equipped with the latest
Panasonic eX2 IFE technology by the end
of the year.
Etihad Airways Annual Report 2011
33
Etihad Cargo a record performance
Etihad Cargo expanded its product portfolio with the
launch of the FAST-TRACK premium product, offering
priority handling and faster connectivity. The product
has been well received and is generating more than
US$1 million in revenue per month.
34
Etihad Airways Annual Report 2011
A precious cargo shipment facility will be launched in
2012 in collaboration with Linfox Armaguard.
93.0
2011
86.3
2010
107.3
2009
310
263
The business will move forward with implementation
of new modules of the Cargo Max Revenue
Management system, offering revenue improvement
opportunities through enhanced inventory, allotment
and bid pricing controls.
Cargo Tonnage
(’000)
2011
A new record in charter revenue was achieved during
the year, with revenue in excess of US$50 million,
accounting for seven per cent of cargo revenue.
In March 2011, Etihad Airways appointed Jettainer as
its Unit Load Device (ULD) provider, focusing on cost
reduction and reduced fuel burn by deploying lighter
weight ULDs.
2010
The freighter network continued to be optimised and
expanded, with the addition of Almaty, Amsterdam,
Cairo, Djibouti, Johannesburg, Kabul, Kandahar,
Karachi and Lahore. The freighter network grew to 27
stations, 10 of which are freighter-only stations.
The scheduled trucking frequency from Abu Dhabi
to Dubai and Sharjah expanded, increasing to 115
weekly departures, to allow a greater focus on
targeting business destined throughout the UAE.
Cargo Revenue
per Freighter
(US$m)
219
During the year, the freighter fleet grew from six to
seven aircraft with the introduction of Etihad Cargo’s
first Boeing B777 freighter. Freighter capacity now
accounts for one third of the total Available Tonne
Kilometres (ATKs) offered for sale.
In addition to the existing UAE road trucking
schedules operated by Al Mazroui International Cargo
Company, scheduled trucking was launched from
Abu Dhabi to Bahrain, Dammam, Doha, Kuwait and
Muscat, using the capabilities and existing schedules
of DHL and Dnata-PWC.
2009
Etihad Cargo achieved a strong performance in
2011, with revenues exceeding budget by more than
US$33 million and year-on-year revenue growth of
over US$133 million. Freight carried grew nearly 18
per cent year-on-year to average more than 26,000
tons per month, with a record tonnage month in
December, which exceeded 29,000 tons.
Etihad Airways Annual Report 2011
35
Operations a commitment to technical excellence
Etihad Airways’ Operations division is responsible
for delivering a safe, punctual and efficient customer
experience of the highest quality.
In 2011, Etihad Airways operated 56,643 flights, an
increase of seven per cent, or 3,553 flights, on the
previous year. Despite this increase, only 192 flights were
cancelled, down by 31 per cent, or 85 cancellations, on
2010.
It proved to be a challenging year for Etihad Airways in
terms of maintaining the high on-time performance of
the previous two years. An extraordinarily high number
of external weather and political events impacted
performance for the first half of the year, while from June,
air traffic flow restrictions took their toll. Cumulatively,
these external factors drove the airline’s on-time
performance down to two per cent below target, at 82.6
per cent.
Overall, Etihad Airways’ technical dispatch reliability was
stable, and above industry standard, improving in 2011 to
99.1 per cent – well above target.
Several systems and programs were implemented to
automate processes and improve efficiency. Etihad
Airways’ non-flight data monitoring platform, for
example, allows the operations team to read aircraft
system data more quickly and with a higher data
consistency than before at a fraction of the cost. Etihad
Airways also upgraded its capability to communicate from
the ground to the aircraft by implementing new enhanced
tools to facilitate greater flexibility and speed of data
processing.
A network-wide fuel and combined route optimisation
project was completed after a 15-month implementation.
This system allows for the real time comparison of fuel
36
Etihad Airways Annual Report 2011
costs versus route costs, and ultimately the selection of the
most efficient route, based on multiple input parameters.
The year was marked by a series of firsts, including the
successful training and graduation of the first female
Emirati First Officer, the first Emirati engineer, and the first
female Captain.
A total of 215 pilots, 900 cabin crew and 113 chefs were
recruited and trained.
Etihad Airways’ instructor training programs were
significantly upgraded during the course of 2011 to
enhance standardisation in pilot training and flight safety.
The Technical division oversaw an ongoing program of
innovation and product enhancement to ensure Etihad
Airways aircraft are maintained to the highest standards.
The Airbus A330-200 aircraft fleet was extensively
reconfigured from three to two classes while the retrofit
program for the new Diamond First Class suite on the
Airbus A340 fleet continued to ensure a consistent
product across the airline. In 2011, the first Airbus A330
aircraft in Etihad Airways’ fleet was fitted with onboard
connectivity.
Adding to the network of local line maintenance centres
at Etihad Airways outstations, a new facility was opened
in Manchester, where 12 people are employed to service
Etihad Airways aircraft.
The first quarter of 2011 saw the “Arab Spring” civilian
uprisings in Tunisia, Egypt and Bahrain, followed quickly
by the earthquake and tsunami disaster in Japan. Despite
these unprecedented and disruptive events, Etihad
Airways’ scheduled operations remained steady and
wholly complete even though contingency plans were in
It has been an amazing journey for Etihad Airways. We are
proud of achieving our goal of profitability in only eight years
– and more importantly, to have done so while maintaining our
absolute commitment to the highest standards of safety, which
will always be our paramount concern.”
Richard Hill, Chief Operations Officer
Etihad Airways Annual Report 2011
37
place to respond to the unique demands of each event. The crisis
in Egypt, in particular, brought about a rapid response from the
operations group to repatriate UAE nationals. Over a three-day
period Etihad Airways was able to provide assistance to more
than 1,000 UAE nationals.
The earthquake and tsunami in Japan saw another unique
challenge for the industry and Etihad Airways was one of the few
airlines that continued to operate to both Narita and Nagoya
throughout the crisis. The welfare of the airline’s Japan-based
staff, their families, and the flight deck and cabin crew operating
into Japan, became top-priority until the threat diminished, and
by late April a state of normalcy had returned.
Good progress was made in fuel and carbon emission savings
by refining operating procedures, optimising flight routes and
altitudes, and reducing aircraft weight. These, together with
improved payloads, resulted in a five per cent improvement in
efficiency per RPK from 2010.
Working with a wide range of stakeholders, the airline
continually looks at all phases of flight for potential fuel savings.
Locally, the introduction of new approach routes (planned
for the third quarter of 2012) and landing procedures in Abu
Dhabi will allow for the decrease of each flight path by 33 flight
kilometres. More widely, demonstration flights across the Indian
Ocean indicated substantial emissions savings if the airline
were able to make better use of its onboard flight management
systems to identify more flexible, fuel efficient routes.
2011 saw the introduction of a formalised biofuel strategy.
In addition to its investment with the Masdar Institute-led
consortium conducting research into viable, locally produced
biomass for alternate fuel, Etihad Airways operated its first
demonstration flight using a biofuel blend in January 2012.
38
Etihad Airways Annual Report 2011
Safety Etihad Airways’ top priority
Safety was once again the priority
and preeminent focus for the
Operations division in 2011.
The division’s objectives are:
»»Zero accidents
»»Continuous decrease in the severity of incidents and occurrences
»»Continuous improvement in safety culture
In 2011, a 61 per cent reduction in risk for identified hazards across
all operational areas was achieved.
The new Environmental Health and Safety Management System,
approved by the Abu Dhabi Department of Transport, was
implemented in 2011 in addition to Etihad Airways’ own Safety
Management System, which is designed to manage safety proactively
and promote a positive safety culture.
Etihad Airways’ Safety Week, which took place in May, and a Pilot
Safety Seminar in October were both well attended.
The biennial IOSA-renewal audit is scheduled for 2012. The industry’s
most challenging operational audit will be conducted by an external
international audit team in May. This follows successful IOSA audits in
2006, 2008 and 2010 – all of which were passed with no findings.
Etihad Airways Annual Report 2011
39
Etihad Guest miles of rewards
Etihad Guest, Etihad Airways’ loyalty program,
enjoyed a stellar year as membership increased by a
third for the second year in succession. By the end
of 2011, its sixth year of operation, Etihad Guest had
more than 1.3 million members.
The number of miles accrued by members rose by
42 per cent and Total Partner Revenue was up by
some 207 per cent, largely due to the success of
co-branded credit card initiatives with Abu Dhabi
Commercial Bank and Abu Dhabi Islamic Bank.
In 2011, Etihad Guest announced the launch of a
major initiative that allows members to redeem their
miles at up to 30 million points of sale across the
globe. This new facility, which comes into effect in
2012, will revolutionise the program, effectively
giving Guest Miles the same liquidity as major global
currencies. The ’virtual credit card’ will cement
the program’s status as the most innovative in the
industry.
Member redemptions also rose strongly,
outperforming 2010 by 68 per cent.
Over the course of the year, 15 accrual partners
were added to the Etihad Guest portfolio, giving
members the opportunity to earn and burn miles
with a total of 75 partners.
New partners include Malaysia Airlines, American
Airlines and bmi; blue chip brands such as Avis,
Citibank and American Express Membership Reward;
and local firms such as Etisalat, Mobily and Atlantis
The Palm Hotel.
Innovative member-only promotions such as the
raffle draws for Paddock Club passes to the 2011
Formula One Etihad Airways Abu Dhabi Grand Prix
and an all expenses paid trip to the Maldives, saw
some 34.5 million miles redeemed.
40
Etihad Airways Annual Report 2011
Etihad Airways Annual Report 2011
41
Sales a pillar of sustainable profitability
In 2011, Etihad Airways continued the development
of its world class global sales and distribution
network.
»»Distribution was broadened with a concerted strategy to increase global deals, and to strengthen relationships with key travel trade partners at local and global levels, particularly with travel management companies specialising in business travel
»»Sales teams were strengthened with additional specialist corporate sales executives and regular advanced sales training programs
»»Training and development for the sales teams placed emphasis on new sales technology and a more analytic approach to sales, to leverage substantial investments made in tracking analysis and reporting during the year
As part of the work to strengthen distribution, there
was also increased focus on allocating inventory for
group travel, supporting efforts of the commercial
team to service important tour operator series traffic
as well as ad hoc groups.
Etihad Airways also achieved significant growth
from direct sales in 2011, using direct channels
including Etihad Holidays, destination management
company Hala Abu Dhabi, etihad.com, Etihad shops
in the UAE and the airline’s global contact centres.
Direct sales grew as a proportion of overall sales
throughout 2011 in line with strategic objectives.
During 2011, the stature of Hala Abu Dhabi grew
within the industry, and over the course of the year,
it was the inbound tour operator for internationally
prestigious events such as the World Economic
Forum and the Arab Air Carriers Organisation
(AACO) Annual General Meeting.
Etihad Airways continued to invest in its global
contact centres to support its expanding network.
At the beginning of 2011, Etihad Airways had three
contact centres: Abu Dhabi, Al Ain and Mumbai.
By the end of the year these three centres employed
450 people, 51 per cent of the people employed
in the UAE being Emiratis, predominantly women
based in Etihad Airways’ Al Ain centre.
Following the signing of the Memorandum of
Understanding (MoU) with Manchester Airport
Group and MIDAS (Manchester’s Inward Investment
Agency) on March 23, 2011, planning began on
Etihad Airways’ European contact centre. The 178seat contact centre, located in the Voyager Building
at Manchester Airport, was officially opened on
February 6, 2012. Currently employing 78 people,
including a mix of experienced travel professionals,
linguists and school leavers, the centre is planned to
grow to 160 by July 2012 and will handle calls from
over 25 markets in 13 languages.
Globally, the centres received more than 2.7 million
calls in 2011, a number which is expected to grow
to more than three million in 2012.
etihad.com is an integral sales and marketing
channel for the airline, and has grown significantly
as a primary direct distribution channel. During
2011, bookings grew by 49 per cent, driven by a
29 per cent increase in visits. Revenue grew by 35
per cent. Additional language capability was added
during 2011, making the website available in 10
languages: English, Arabic, French, German, Italian,
Chinese, Japanese, Korean, Russian and Thai.
Strategic pricing initiatives and the further
development of the airline’s inventory systems were
the hallmarks of revenue management during 2011.
Etihad Airways migrated to a new Origin and
Destination inventory management system in 2011.
This system assesses optimum use of the airline’s
inventory of seats, based on each passenger’s total
journey rather than by sector. Development of a
new forecast model based on 2011 data is under
way and will be deployed in 2012. This new
forecast methodology will take advantage of real
time passenger booking data to increase forecast
accuracy and further improve revenue generating
capabilities.
A major fare class realignment exercise was
undertaken in July 2011, with the new inventory
control methodology providing an opportunity to
create new competitive and revenue generating
market fares.
1
2
1 Al Ain Contact Centre
2 etihad.com is an integral
sales and marketing channel
We have achieved global recognition as a leading airline
brand that stands for an inspirational customer experience.
Our strong brand and exceptional product allow us to
accelerate sales across all market segments, as the airline of
choice for consumers and trade partners.”
Peter Baumgartner, Chief Commercial Officer
42
Etihad Airways Annual Report 2011
Etihad Airways Annual Report 2011
43
Information technology helping drive the efficiencies needed for profitability
The role of information technology (IT) as a key
enabler in any business is critical, and Etihad Airways
is no exception.
The Sabre-created software will be implemented
by February 2013 and will significantly reduce the
airline’s technology costs while streamlining processes.
The airline embraces IT, placing great emphasis on the
need for sound and robust platforms to underpin the
way the airline conducts its business. Equally, ongoing
investment in systems and processes to enable a
smarter and more efficient company is crucial.
This groundbreaking deal will play a pivotal role in
generating efficiencies to deliver the airline’s future
revenue growth.
Etihad Airways’ IT infrastructure is a complex
environment with more than 3,000 personal
computers and 300 servers running 170 applications
across a global network.
2011 saw the renewal of the IT foundations that will
facilitate Etihad Airways’ ability to remain a dynamic
and competitive company over the next decade. This
included a restructure in the IT department with a
renewed emphasis on effective engagement across the
organisation, offering efficient, cost-effective IT support
aligned to the commercial objectives of each division
within the business.
The restructure made provision for the creation of
an Innovation and Technology Exploitation group to
identify opportunities for new technologies to improve
existing processes, such as the use of tablet devices by
cabin crew to enhance customer service and reduce
paperwork.
In 2011, Etihad Airways signed a revolutionary 10-year
technology deal with Sabre Airline Solutions – the
single largest technology-enabled business change that
Etihad Airways will undertake in a decade – to utilise
cutting edge, integrated software across reservations,
inventory, marketing, planning, e-commerce,
distribution and departure control operations.
44
Etihad Airways Annual Report 2011
Important systems were upgraded or migrated during
2011. These included:
»»the corporate system for managing financial, supply chain and human resources transactions;
»»the e-commerce system used to drive web selling, promotions and customer engagement;
»»the airline’s Customer Relationship Management system, aimed at delivering more effective service for the airline’s passengers; and
»»the Aircraft Movement and Crew Control system, which enables efficient on-the-day management of Etihad Airways’ fleet schedule and crew duties.
In addition, more than 30 new projects were delivered
during the year, ranging from complex revenue
management systems to simple web forms to improve
business processes.
A major program of infrastructure renewal was
commenced to ensure that Etihad Airways benefits
from scalable and best practice technology to support
its operations over the next decade.
In the year ahead, Etihad Airways will continue to
focus on ensuring it has the most efficient and effective
IT systems to support the business and its people.
Etihad Airways Annual Report 2011
45
Partnerships and alliances stretching the network and contributing to revenue
Etihad Airways has pursued an effective strategy of
forming alliances with carriers around the world to
enhance its network and marketing reach.
The convenience and seamlessness of these
arrangements has been critical in generating
customer loyalty.
At December 31, 2011, Etihad Airways had
one equity partnership (with airberlin), Europe’s
sixth largest carrier providing Etihad Airways
with increased access to Germany, Austria and
Switzerland and points across Europe and into
North America.
During the year, Etihad Airways announced eight
new codeshare partnerships with: airberlin, Air
Astana, Air New Zealand, SNCF (French Railways),
Czech Airlines, Vietnam Airlines, Tap Portugal, NIKI
and Hainan Airlines.
The airline’s 35 codeshare deals with key partners
around the world have created a comprehensive
virtual network giving customers easy access to
destinations not directly served by the Etihad
Airways fleet. The agreements have also generated
considerable revenue for Etihad Airways.
Revenue generated from alliance traffic grew by
more than US$418 million in 2011, up 48 per cent
on the previous year. Alliance revenue contributed
over 15 per cent of the airline’s total 2011
passenger revenue, with around 25 per cent of this
coming from premium cabins.
The comprehensive agreements include codeshare
flights, reciprocal frequent flyer programs, premium
lounge access and other customer benefits,
depending on the partner.
An agreement was also reached with Air Seychelles
and this partnership is a strategic move by both
carriers to support the Mahé – Abu Dhabi route.
However, January 2012 saw this relationship
transformed, following the acquisition by Etihad
Airways of a 40 per cent stake in the national
carrier of the Seychelles. In addition to the
capital investment and loan, this long-term
strategic agreement makes provision for a five
year management contract that will see the
implementation of strategic measures to encourage
Air Seychelles’ long-term commercial growth and
sustainability.
Etihad Airways
codeshare partnerships:
Aer Arann*
airberlin
Air Astana
Air Malta
Air New Zealand
Air Seychelles***
Alitalia
American Airlines
ANA
Asiana
Bangkok Airways
bmi
Brussels Airlines
Cyprus Airways
Czech Airlines
flybe
Hainan Airlines
Jet Airways
Kuwait Airways
Malaysia Airlines
Malév**
Middle East Airlines
NIKI
Olympic Airlines
Philippine Airlines
Royal Air Maroc
Saudi Arabia Airlines
Siberia Airlines (S7)
SNCF (French Railways)
Sri Lankan Airlines
TAP Portugal
Turkish Airlines
Ukraine International
Virgin Australia
Vietnam Airlines
Yemenia
* To become Aer Lingus in 2012
** Ended operations in 2012
*** Commenced January 2012
One of the keys to success is providing convenient schedules that
get our customers where they want to go. Alliances and partnerships
enable us to offer an enhanced network of services, which translates
into greater choice for our customers, in turn generating revenue for
the airline – and this makes good commercial sense.”
Kevin Knight, Chief Strategy and Planning Officer
46
Etihad Airways Annual Report 2011
Etihad Airways Annual Report 2011
47
Joint ventures subsidiaries and equity partnerships
Etihad Airways is 100 per cent owned by the
Government of Abu Dhabi. The airline has the
following investments, subsidiaries and joint
ventures, all of which are accounted for in Etihad
Airways’ consolidated financial statements. Joint ventures
»»ASC (Airline Services Centre) Private Ltd is a
wholly owned subsidiary of Etihad Airways. ASC
Airlines Service Centre is located in India and
provides services as a captive call centre for
Etihad Airways.
»»Amadeus Gulf LLC is a subsidiary of Etihad
Airways, owned jointly by Etihad Airways (51 per
cent) and by the Amadeus IT Group S.A. (49 per
cent). Amadeus is a leading global distribution
system and technology partner for the world’s
travel and tourism industries. Amadeus Gulf LLC is
present in the United Arab Emirates, the Kingdom
of Bahrain and the Sultanate of Oman. »»Aldar Etihad Investment Properties LLC is a joint
venture between Abu Dhabi’s largest real-estate
developer Aldar Properties and Etihad Airways.
The joint venture was created to acquire Abraj
Tower (later renamed Etihad Plaza) in Abu Dhabi.
Etihad Plaza provides cost effective housing,
recreation facilities, utilities and services to more
than 1,000 members of Etihad Airways’ staff and
the surrounding community.
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Etihad Airways Annual Report 2011
»»Hala Travel Management is a joint venture
between Etihad Airways (80 per cent) and BCD
Travel (20 per cent) providing various travel
management services to the Government of Abu
Dhabi and its clients and supporting the growing
requirement for a comprehensive service for
corporate and government clients, including
global airline reservations, hotel accommodation,
car rental and insurance. It commenced
operations in February 2011.
»»Armaguard Valuables Management LLC is a joint
venture between Etihad Airways (51 per cent) and
the Linfox Group (49 per cent). The company will
provide transportation for valuable goods around
the globe from the second half of 2012.
Equity investments
»»airberlin
In December 2011, Etihad Airways concluded its
first major equity investment increasing its stake
in airberlin, Europe’s sixth largest airline, to 29.2
per cent.
»»Air Seychelles
Etihad Airways acquired a 40 per cent
shareholding in Air Seychelles in January 2012.
The remaining shares in the Seychelles national
airline are held by the Government of the
Seychelles.
Etihad Airways Annual Report 2011
49
1
Marketing driving revenue
In 2011, the primary objective for Marketing was to
support and drive revenue to achieve the airline’s
commercial break-even objective. Overall, marketing
activity delivered a 10:1 return on investment.
Considerable investment was made in digital
marketing over the year, as it continued to demonstrate
a strong return.
This investment included increased search engine
marketing (SEM), ensuring consistent banner activity
in key markets, and increasing online affiliate
partners. SEM was one of the highest returning
activities for the year.
Specific promotional campaigns were developed
to support the launches of new routes including
the Maldives, Seychelles, Chengdu, Düsseldorf and
Shanghai. These campaigns involved introducing the
Etihad Airways brand and service into the new market,
as well as stimulating interest within the airline’s home
and key connecting markets.
Marketing continued to leverage the Etihad Guest
database to incentivise members to fly in the
premium cabins, in particular through popular
Double/Triple miles offers for Pearl Business and
Diamond First Class bookings. Direct marketing
campaigns were also activated in cooperation with
major local and international partners, such as Abu
Dhabi Commercial Bank (ADCB), Abu Dhabi Islamic
Bank (ADIB), Visa, MasterCard, American Express,
Carrefour and Hertz.
Etihad Airways continued to work closely with the Abu
Dhabi Tourism and Cultural Authority and international
partners such as Tourism Thailand, Tourism New
South Wales, Tourism Queensland, Tourism Ireland,
and Tourism Manchester. Joint activity with these
organisations allowed Etihad Airways to stretch its
marketing budget, while developing campaigns to
support leisure traffic across the network in key source
markets.
50
Etihad Airways Annual Report 2011
In 2011, Etihad Airways continued to drive the
destination marketing program ‘essential abu
dhabi’, coordinating activity across over 40
destination partners and managing all related
marketing communications. The program’s website
– essentialabudhabi.com – had more than 140,000
unique visitors during the year.
Hala Abu Dhabi managed inbound MICE business for
major conferences and exhibitions hosted by the Abu
Dhabi Tourism and Cultural Authority.
Etihad Airways announced the expansion of its
successful partnership with Manchester City Football
Club in June 2011. The comprehensive and innovative
10-year partnership involves the extension of the
existing shirt sponsorship, as well as naming rights for
the stadium and the expansive surrounding grounds,
now known as Etihad Stadium and Etihad Campus.
In celebration of this milestone, a special Manchester
City-liveried Airbus A330-200 aircraft in the club’s
signature sky blue colour entered into service. The
aircraft operates on the Abu Dhabi-Manchester
route and also serves Milan, Frankfurt, Brussels,
Johannesburg, Kuala Lumpur, Jakarta, Singapore,
Istanbul and destinations throughout the Middle East
and India.
In 2011, Etihad Airways’ major sponsorships –
Manchester City Football Club, Etihad Stadium
Melbourne, Harlequins Rugby Club, GAA Hurling,
and the Formula 1 Etihad Airways Abu Dhabi Grand
Prix – helped extend the airline’s brand reach across
the world.
Etihad Airways’ multi-tiered agreement in support of
Abu Dhabi’s involvement in the 2011/12 Volvo Ocean
Yacht Race saw the airline’s livery featured prominently
on the hull and sails of Abu Dhabi Ocean Racing’s
entry, Azzam, as well as across its Abu Dhabi Ocean
Racing team apparel during the global event.
Etihad Airways was also the presenting sponsor for the
fortnight-long race stopover in Abu Dhabi and title
sponsor of the In-Port Race.
2
Other major Abu Dhabi sponsorships included the
HSBC Abu Dhabi Golf Championships, the Mubadala
World Tennis Championships, and the World
Professional Jiu-Jitsu Championships 2012.
As part of a strategy to target the Indian market and
Indian nationals worldwide, Etihad Airways continued
to work with rising Bollywood star Katrina Kaif, who is
an Etihad Airways brand ambassador.
Throughout the year, incremental traffic
opportunities were generated through targeted
tactical campaigns. Regular Breaking Deals
offers were made available on the web in
major markets. The regular online deals,
initially introduced in 2010, are now available
in 10 key markets and offer highly-discounted,
last-minute offers to encourage repeat visitors
to etihad.com.
Major tactical promotional campaigns were
developed and executed throughout the year,
stimulating demand during specific periods –
for example, the ‘Up, Up & Away’ campaign in
April and May provided a necessary boost in
bookings during the shoulder season. This was
followed by a special Ramadan sale targeted at
increasing outbound traffic for short holidays,
inbound traffic from GCC markets and key
traffic over the Abu Dhabi hub.
3
4
1 Etihad Airways supported the 2011/12 Volvo Ocean Yacht Race.
2 Etihad Stadium in Melbourne.
3 essential abu dhabi livery.
4 In June 2011, Etihad Airways announced the expansion of its successful
partnership with Manchester City Football Club, a comprehensive and
innovative 10-year partnership.
Etihad Airways Annual Report 2011
51
Social responsibility and sustainability creating a community
Etihad Airways acknowledges its position as an
integral part of society, as well as its potential to
have both positive and negative impacts on the
communities in which it operates.
Aligned with the greater ambitions and vision of the
Emirate of Abu Dhabi, the Etihad Airways corporate
social responsibility (CSR) and sustainability policy
and supporting strategy is designed to:
»»ensure the airline’s compliance with all applicable international and local regulations and standards;
»»mitigate any potential risks and minimise, wherever possible, negative environmental and social impacts from its operations; and
»»enhance the airline’s reputation through the implementation of industry best practice in the fields of sustainability and social responsibility.
52
Etihad Airways Annual Report 2011
Etihad Airways’ strategy is based on the premise that
CSR is a collaborative process, and one that will only
succeed in partnership with internal and external
stakeholders – which is why the airline’s CSR and
sustainability program is called Together.
In these four areas, it is Etihad Airways’ aim to work
collaboratively in:
Together is a four-part policy, communications and
reporting framework for engagement with a broad
range of stakeholders – staff, the local community
and economy, and the greater communities across the
airline’s global network.
»»making a difference, through measurable improvement, year on year.
»»identifying and developing awareness of issues and challenges;
»»focusing action to address these challenges; and
The company’s second CSR Report, which
complements this Annual Report, will provide
comprehensive information in each of these four areas
mapped against the Global Reporting Initiative Index.
Etihad Airways Annual Report 2011
53
People and performance on target for growth and profitability
Active recruitment of employees continued
throughout the year to support the growth of the
airline and its business objectives. Almost 7,700
of the airline’s employees are based in Abu Dhabi,
with 1,300 located in 46 other countries. Of the
total number of employees, 1,185 are pilots and
3,230 are cabin crew.
UAE nationals, including those at senior level,
join the airline through development programs
and as direct entry appointments. Forty-two
UAE nationals graduated in September from the
airline’s three core training streams as cadet pilots,
technical engineers and graduate managers.
Staff costs are second only to fuel costs for the
company, so great attention was paid to headcount,
with both staff numbers and associated cost targets
being met for the year.
In March 2011, the airline opened a unique allfemale Emirati Etihad Airways contact centre in Al
Ain. This followed the completion of a nine month
training and development program by 85 female
UAE nationals.
Etihad Airways’ growth necessitated the
establishment of teams at five new outstations –
Seychelles, Maldives, Chengdu, Düsseldorf and
Bangalore.
New development programs were introduced to
grow a strong pipeline of capability to support
Etihad Airways’ airport management and ground
services operations.
With 52 external senior appointments and more
than 100 internal senior promotions in 2011,
Etihad Airways is increasingly recognised as
an environment for career development and
progression.
A number of other Emirati employees pursued
opportunities on international assignments and
rotations in destinations including the USA,
Australia and Malaysia, where they were able to
broaden their exposure to the business and gain
experience working in the global arena.
Etihad Airways’ Emiratisation strategy accelerated in
2011 with the number of UAE nationals employed
at year end reaching 819, an increase of 335 – or 70
per cent – on 2010. UAE nationals are the second
highest nationality at Etihad Airways and comprise
more than 18 per cent of the workforce.
At the end of 2010, Etihad Airways employees
completed their first full year cycle of the new
performance management system ‘iachieve’, with
employees receiving the first pay increases based
on performance in April 2011.
The strategy is supported by local institutions such
as the Abu Dhabi Tawteen Council, the Abu Dhabi
Education Council and the Institute of Applied
Technology.
To address the administrative requirements of a
growing workforce and focus on streamlined and
efficient processes, Etihad Airways implemented
an online self-service function for employees
and managers that facilitates the management of
personal and professional data and key transactions,
such as leave requests, salary payment information
and expense claims. Utilisation of iserve increased
by 71 per cent in 2011.
The new Employee Services intranet site, launched
in January 2011, provides comprehensive
information on employee policies and procedures
around the clock to Etihad Airways employees
wherever they are.
The airline’s adoption of on-line learning was
highly successful in 2011. There was a 500 per cent
increase in courses delivered online, which enabled
a training cost reduction of US$2.7 million.
The Etihad Airways Academy, now accredited by
the International Air Transport Association (IATA),
delivered almost 1,300 classroom-based courses
to more than 12,700 participants, including a
re-launched induction program called ‘Marhaba’,
which equips new employees with information to
achieve an accelerated start in the airline.
The health and safety of Etihad Airways employees
is of utmost importance to the company.
As well as complying with all regulatory health
standards, the airline offers a range of services and
Etihad Airways employees are drawn from more
than 125 nationalities, providing an incredibly
diverse and widely experienced workforce.”
Ray Gammell, Chief People and Performance Officer
54
Etihad Airways Annual Report 2011
Etihad Airways Annual Report 2011
55
benefits to support the wellbeing of its people.
These include accommodation at a number of
major residential locations in Abu Dhabi, including
Etihad Plaza. The airline also provides ‘Fit 2 Fly’
leisure facilities including gymnasiums, pools and
recreational amenities.
Occupancy of the airline’s Abu Dhabi residential
portfolio for more than 4,000 employees and their
families reached 93 per cent by the end of 2011.
Etihad Airways Medical Centre, based at Etihad Plaza,
serves in excess of 650 employees each week. In
addition to aviation and general medicine clinics, the
centre also provides physiotherapy, dental services,
radiology and ultrasound, and laboratory services.
All clinic services are strictly regulated by the Health
Authority of Abu Dhabi and the General Civil Aviation
Authority.
2
1
1 In March 2011, the all-female Emirati Etihad Airways Al Ain Contact Centre was opened. This followed the completion of a nine month
development program and subsequent graduation of 85 female UAE nationals from the Contact Centre program.
(As a percentage
of total employees
less cabin crew and
outstations)
18%
9
2011
Emiratisation
2 Etihad Plaza 3
4
3 Etihad Airways provides ‘Fit 2 Fly’ leisure
facilities including gymnasiums, pools and
recreational amenities.
4 Etihad Airways Medical Centre offers stateof-the-art facilities and access to health and
welfare professionals for all staff.
56
Etihad Airways Annual Report 2011
2011
2010
2009
2009
2011
9%
13%
9
2010
7,855
2010
Employee Cost
per Aircraft
(US$m)
10
7,828
9,038
Total Employees
2009
There is a growing emphasis on disease prevention
and health promotion for the airline’s staff, with
Wellbeing Days firmly established as part of the events
calendar in addition to organised screening campaigns
for conditions including diabetes, cholesterol and
certain types of cancer. The further development of
Occupational Health Medicine and the provision of an
Employee Assistance Program will play an important
part in delivering the highest standard of services to
our employees.
Etihad Airways Annual Report 2011
57
Corporate Governance
Etihad’s management reporting framework
Corporate governance is rigorously enforced in line
with the Manual of Authority through carefully defined
structures and processes. The Manual of Authority
outlines authority limits delegated by the Board to the
Executive Committee, management and staff in order
to run the company’s affairs and operations.
The organisational structure ensures transparent
reporting and necessary checks and balances. A 2009
report by leading global management consulting firm
Oliver Wyman for the Abu Dhabi Audit Authority
concluded that Etihad Airways had “established strong
corporate governance and process redesign”.
Various layers of shareholder, management and
regulatory oversight ensure continuous performance
review against corporate strategic objectives and
external standards.
Meetings
Objective
Frequency
Attendees
Board Meetings
The Board meets the management of the company to ensure
shareholder mandates are effectively implemented. The Board
receives its authority from the shareholder and effectively
delegates that to the management via the Manual of Authority.
Quarterly
Board members, CEO, CFO and
Chief Officers as required
Executive Committee
Meetings
The Executive Committee meets management to discuss and
authorise the carrying out of any activity deemed necessary to
enable the company to achieve its commercial objectives and
operational activities, and to review risks and formulate actions
to address such potential risks.
Monthly
A subcommittee of Board
members, CEO , CFO and Chief
Officers as required
Audit Committee
The Audit Committee provide assurance to the Board over the
qualification, independence, and performance of the registered
public accounting firm (external auditor), and seeks advice from
the company’s internal audit function as to the adherence to
relevant governance standards.
At least five
times a year
Two members of the Board, CEO,
one independent member
including a representative of
Abu Dhabi Accountability
Authority, Audit Committee
Secretary (VP Internal Audit),
CFO and other VPs as required
Chiefs Meetings
The Chief Officers of the company meet to discuss and review
performance to ensure the company achieves its commercial
objectives. At this meeting the CEO updates his direct reports on
issues affecting the company and feedback of Board, Executive
Committee and other meetings. The Chief Officers update the
CEO on issues and focus areas relating to their divisions.
Monthly
CEO, Chief Officers
Performance Review
Prioritisation Meetings
These meetings focus on the performance of the company
including planned initiatives and continuous improvement.
Quarterly or
as required
CEO, Chief Officers, PMO,
Divisional Business
Review Meetings (BRM)
The CEO meets with the management teams on a monthly basis
to ensure the organisation’s performance is aligned to strategic
objectives and a healthy operational environment exists. This is
done through updating the CEO and other members of the BRM
on initiatives, projects, risks and critical performance indicators
and focus areas of the division.
Monthly
CEO, Chief Officers, VPs,
Departments Heads and
Divisional Financial Controllers
Divisional
Organisational Review
Meetings (ORM)
Divisional Organisational Review Meetings (ORM) are held to
review the divisional organisation structure and identify resource
needs, gaps, efficiency measures, career development plans and
succession planning.
Twice
quarterly
CEO, Chief Officers and HR
Business Partners
Etihad Airways governance framework
Shareholder
Board Meeting – Quarterly
Executive Committee – Monthly
Audit Committee – Quarterly
Management
Manual of Authority
Tender Board Meetings
Internal Audits
Regulatory
External Audit – KPMG Annual
Financial Review – KPMG Quarterly
Government Audit – ADAA Periodic
Operations Audit – GCAA Annual
Safety Audit – IOSA Biennial
58
Etihad Airways Annual Report 2011
Cross functional VPs
A centralised Project Management Office (PMO) and a Value Management Committee ensure an ethical and objective process for the procurement of
goods and services, managed by the Tender Board.
Etihad Airways has recently implemented a Fraud Control Policy and a reporting hotline to guide employees when faced with incidents of potential
fraud. During 2012, the company’s anti-fraud efforts will be complemented by a comprehensive compliance program outlined in a new Code of
Business Conduct. The program will be supplemented with dedicated training.
Etihad Airways Annual Report 2011
59
Etihad Airways Executive
James Hogan
President & Chief Executive Officer
Australia
James Rigney
Chief Financial Officer
Australia
Peter Baumgartner
Chief Commercial Officer
Switzerland
Richard Hill
Chief Operations Officer
United Kingdom
Kevin Knight
Chief Strategy & Planning Officer
United States of America
Ray Gammell
Chief People & Performance Officer
Ireland
Jim Callaghan
General Counsel & Company Secretary
Ireland
James Hogan was appointed President and Chief
Executive of Etihad Airways on 10 September 2006,
bringing more than 30 years of travel industry expertise
to the airline.
James Rigney was appointed Executive Vice President Finance at Etihad Airways in October 2006, and
became the airline’s Chief Financial Officer in March
2009.
Captain Richard Hill joined Etihad
Airways in January 2007 and was
appointed Chief Operations Officer in
April 2009.
Kevin Knight joined Etihad Airways as
Chief Strategy and Planning Officer in
March 2011.
Ray Gammell joined Etihad Airways as
Chief People and Performance Officer
in April 2009.
Jim Callaghan became Etihad Airways’
General Counsel and Company Secretary in May 2009.
Mr Hogan started his career in 1975 at Ansett Airlines,
and subsequently held senior positions with bmi, Hertz,
Forte Hotels and Gulf Air.
Mr Rigney’s career in aviation has spanned two decades. He joined Etihad Airways from Gulf Air where he
was Head of Corporate Strategy.
Peter Baumgartner was appointed Chief Commercial
Officer in April 2009. He joined Etihad Airways in April
2004 and has managed the airline’s intense global
commercial efforts during a period of rapid growth –
both its network expansion and the introduction of new
product and service innovations.
Prior to joining Gulf Air in 2002, Mr Rigney held a
number of senior strategic and commercial positions
within the Ansett Group in Australia.
He oversees all of the airline’s human
resources functions, including recruitment, workforce development and
performance management, as well as
being responsible for Etihad Airways’
Emiratisation scheme.
Previously, he spent nine years at Europe’s largest low cost carrier, Ryanair
Ltd, as Company Secretary and Director of Legal and Regulatory Affairs.
At Hertz, his roles included directorships of the
marketing, sales and operations divisions. In 1995,
based in London, he joined the executive management
committee as Vice President, Marketing & Sales for
Europe, Middle East and Africa.
He is responsible for pricing, capacity and revenue management, route
and network planning, alliances and
aircraft acquisitions. He also leads
Etihad Cargo.
In 1997, Mr Hogan became Service Director for bmi
British Midland, leaving in 1998 to join the Granada
Group as Worldwide Sales Director, where he sat on the
board of Forte Hotels.
He returned to bmi in 1999 as Chief Operating Officer
and a member of the Board, responsible for flight and
ground operations, sales and marketing, commercial,
cargo, engineering and handling service companies.
In 2002, Mr Hogan joined Gulf Air, where he served as
President and Chief Executive for four years.
Mr Hogan is a fellow of the Royal Aeronautical Society
and a former Non-executive Director, and member of
the Board’s Audit Committee, of Gallaher Plc. In 2010,
he served as the Chairman of the Aviation Travel and
Tourism Governors at the World Economic Forum. He
currently serves on the Executive Committee of the
World Travel and Tourism Council. In June 2011 he was
appointed to the International Air Transport Association
(IATA) Board of Governors. Following the acquisition of
a majority shareholding in Air Berlin plc, in December
2011, he was named Vice Chairman of the airline.
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Etihad Airways Annual Report 2011
Mr Rigney is responsible for finance, treasury, information technology, supply chain and property at Etihad
Airways. He is also a Non-executive Director of Abu
Dhabi Aircraft Technologies (ADAT) and sits on the
Board of airberlin.
A chartered accountant, he holds a Bachelor of Business and an MBA from RMIT University in Melbourne,
Australia.
Mr Baumgartner heads the commercial strategy and
planning function, global sales, marketing, product,
service delivery, call centres, e-commerce, Etihad Holidays and the airline’s loyalty program, Etihad Guest.
Prior to joining Etihad Airways, he held a number of
senior roles within the Belgian and Swiss aviation industries, including at Swiss International Airlines where
he was responsible for marketing development.
Peter Baumgartner is Chairman of the Board of Directors of Hala Travel Management (HTM), a joint-venture
company with BCD Travel B.V.
He is responsible for Etihad Airways’
flight operations, inflight services,
airport operations, technical, training
standards, flight safety and quality and
aviation security, including the airline’s
emergency response procedures.
Captain Hill began his aviation career
as a cadet pilot at British Airways in
1979. He spent 20 years with bmi
British Midland, where he rose to the
position of Director Flight Operations
and finally Director Operations.
He joined Gulf Air in 2002 as General
Manager Operations Technical and
Head of Flight Operations. In 2006 he
served as Head of the Flight Operations
Inspectorate Department for the UK
Civil Aviation Authority.
Captain Hill maintains his pilot qualification by operating as a Captain on the
Airbus A330/A340 fleet.
Mr Knight has more than 30 years’ experience in the airline industry, including business development, strategic
planning and operations. Before joining Etihad Airways, he spent 17 years at
United Airlines, the last five as Senior
Vice President Planning. He previously
held senior roles at Northwest Airlines
and Republic Airlines.
Mr Knight holds a Bachelor of Science
in Business Administration from Westminster College, Utah, and an MBA
from the University of Utah.
Mr Gammell joined Etihad Airways
from the Royal Bank of Scotland (RBS),
where he was Director of Human Resources for Europe and the Middle East
regional markets. Prior to that, he held
similar positions at the Ulster Bank
Group in Ireland and RBS European
Consumer Finance, as well as with
Intel Corporation in the USA.
Mr Gammell holds a Masters of Business in Organisational Development
and HR Management from University
College, Dublin, and is a fellow of
the Chartered Institute of Personnel
Development.
At Ryanair, Mr Callaghan was responsible for setting up the airline’s legal
function and for corporate governance
and liaison with the Board. He actively
managed a suite of ongoing regulatory
and legal issues relating to competition law, trademarks, airport contracts,
advertising standards, consumer law,
and commercial litigation.
Before joining Ryanair in 2000, Mr
Callaghan spent several years at international law firms in the United States
and in Brussels.
He holds a Juris Doctorate and a Masters in Public and International Affairs
from the University of Pittsburgh and a
Masters in European and International
Law from Vrije Universiteit in Brussels.
Etihad Airways Annual Report 2011
61
Etihad Airways Management
Belinda de Rome
Senior Vice President
Corporate Affairs
Australia
Gordon Penfold
Senior Vice President
Information Technology
United Kingdom
Belinda de Rome was appointed
Etihad Airways’ Senior Vice President Corporate Affairs in August
2009.
Gordon Penfold was appointed
Senior Vice President Information
Technology in December 2010.
She is responsible for the airline’s
public affairs and corporate communications, including global
media relations, social media
strategy, internal communications, corporate social responsibility, environmental affairs, and
corporate events.
She joined Etihad Airways with
more than 20 years’ experience in
public relations and communications gained in two of Australia’s
pre-eminent corporations – Qantas Airways and the Commonwealth Bank of Australia – where
her roles included responsibility
for public affairs strategy, media
relations, issues management,
crisis communications, internal
communications, marketing
communications and sponsorship
management.
Ms de Rome has a Bachelor of
Arts degree in Communication
and a Diploma in Education.
Leading the IT team, he is
responsible for Etihad Airways’
technology and communications
framework as well as IT development, delivery and maintenance.
Mr Penfold joined Etihad Airways
from British Airways, where he
was Chief Technology Officer.
His extensive experience includes
sales, marketing, operations and
business management roles in the
IT services, telecommunications,
defence and aviation sectors, with
assignments in the UK, Europe,
Japan and North America, and
long-term postings in South Africa
and Hong Kong.
In 1997 he joined British Airways
as Director and General Manager of BA’s subsidiary company
Speedwing Airport Services (Malaysia), managing the delivery of
major projects at the new Kuala
Lumpur International Airport at
Sepang, and for the commercial
development and P&L performance of the company.
Mr Penfold graduated in Economics and Law from the University
of London, and gained postgraduate qualifications in Computer
Science from Brunel University.
62
Etihad Airways Annual Report 2011
Werner Rothenbaecher
Senior Vice President Technical
Germany
Werner Rothenbaecher joined Etihad Airways in November 2005.
Prior to joining Etihad Airways, he
held a number of senior technical
operational roles with Lufthansa,
including assignments with Lufthansa’s regional airline and cargo
division.
His early career was with the German Air Force, where he led the
maintenance organisation of the
German Special Air Mission Wing
and reached the rank of Lieutenant
Colonel.
At Etihad Airways, he is responsible for engineering, technical
purchasing and contracts, the
technical operations control centre, aircraft cost control, aircraft
specification, technical quality
and reliability control, and line
maintenance in Abu Dhabi and
worldwide.
Mr Rothenbaecher has a Masters
degree in Aircraft Engineering and
Aero Space Technology from the
University of Munich.
Khaled Al Mehairbi
Senior Vice President
Government and
Aeropolitical Affairs
United Arab Emirates
Khaled Al Mehairbi joined Etihad
Airways in January 2004 as Head
of Corporate Affairs.
He was appointed Senior Vice
President Government and
Aeropolitical Affairs in 2009,
and is responsible for UAE and
international government affairs,
negotiating bilateral air service
agreements for the airline.
Before joining Etihad Airways, Mr
Al Mehairbi was Airport Director of Abu Dhabi International
Airport. He also served as General Manager Abu Dhabi Airport
Services.
He has extensive experience
in airport operations, including ground handling and civil
aviation.
He is Chairman of the Aeropolitical Watch Group of the Arab Air
Carriers Organisation.
Mr Al Mehairbi has a Bachelor
of Business from the USA’s Salem
University.
Geoff Linaker
Senior Vice President
Operations
United Kingdom
Hasan Al Hammadi
Senior Vice President
Executive Affairs
United Arab Emirates
John Shepley
Senior Vice President
Network Management
Australia
Roy Kinnear
Senior Vice President Revenue
Management and Planning
Northern Ireland
Geoff Linaker joined Etihad
Airways in 2010 as Senior Vice
President Operations, after serving with bmi British Midland as
Director of Operations.
Hasan Al Hammadi joined Etihad
Airways in 2009 as Vice President
Special Projects, and was appointed Senior Vice President
Executive Affairs in 2010, with
additional responsibility for corporate security.
John Shepley joined Etihad Airways in November 2006 as Vice
President Network Planning
Roy Kinnear joined Etihad
Airways in 2006 as Vice President
Revenue Management.
He was appointed Senior Vice
President Network Management
on December 1, 2011, and is responsible for development of the
airline’s network and schedules,
as well as developing and managing Etihad Airways’ relationship
with more than 35 airline partners
worldwide.
He was appointed Senior Vice
President, Cargo in 2010 and to
his current role, as Senior Vice
President Revenue Management
and Planning in 2011.
He has 35 years’ experience in
the aviation industry, including 15
years as a regulatory Postholder.
His previous roles include aircrew instruction, examining and
technical management.
He is responsible as the GCAA
nominated Postholder for Etihad
Airways Flight Operations, Guest
Services, Crew Resources and
Operations Logistics, in addition
to his management role as a current A330 Captain.
Mr Al Hammadi has more than
25 years’ experience as a senior
adviser to the UAE Government
on matters of security, intelligence, national and international
political relations, protocol and
diplomatic affairs.
He has held various senior roles
across the Ministry of Interior,
State Security, and the Crown
Prince Court as well as the
Presidential Court. He is a former
Director of Private Protocol in
the office of the late HH Sheikh
Zayed bin Sultan Al Nahyan,
Ruler of Abu Dhabi and President
of the UAE.
Mr Al-Hammadi holds a degree
in Petroleum Engineering from
Manchester University.
Before joining Etihad Airways,
Mr Shepley was with Australia’s
Jetstar Airways, where he was
General Manager Network &
Schedules Planning, responsible
for all domestic and international
planning with a fleet of over 50
wide- and narrow-body aircraft.
He has more than 20 years’
experience in aviation, including
senior positions with Ansett Australia, Air New Zealand and Gulf
Air in Sales, Airports, Revenue
Management, Planning and Alliance areas.
Mr Kinnear oversees the revenue
management and commercial
planning for Etihad Airways
passenger and cargo business
streams.
He has 20 years’ experience
in aviation, having previously worked in pricing, revenue
management and scheduling for
British Midland Airways.
Mr Kinnear has previously held
the position of Chairman of the
Board of Amadeus Gulf, the joint
venture GDS company majorityowned by Etihad Airways, and
is currently Chairman of the
Board of Armaguard Valuables
Management LLC, a joint venture
company majority owned by
Etihad Airways for the handling
of high value cash and valuables
shipments.
He has a Bachelor of Science
Economics and Statistics honours
degree from the University of
Ulster.
Carolyn Prowse
Senior Vice President
Corporate Strategy & Special
Projects
United Kingdom
Carolyn Prowse joined Etihad Airways in January 2012 to head up
corporate strategy, mergers and
acquisitions and other special
projects. She is also responsible
for the Project Management
Office at Etihad Airways, which
manages key projects and has
oversight of all other major projects to ensure effective delivery
and strategic alignment of all
projects with the airline’s business
objectives.
Prior to joining Etihad Airways,
she was Managing Director, Head
of Asset Management for Ithmaar
Bank BSC in Bahrain, where she
was responsible for a global portfolio of private equity, investment
banking and strategic investments. Her aviation experience
includes working as a Senior
Manager for Investments and Joint
Ventures at British Airways Plc.
Ms Prowse has extensive experience in corporate strategy,
mergers and acquisitions and
restructuring.
She has a Bachelor of Arts (Hons)
degree in Chemistry from St
Anne’s College, University of
Oxford
Etihad Airways Annual Report 2011
63
‫جوائز عام‬
‫‪ 2011‬تقدير عاملي للتميز والإبداع‬
‫‪2011 Awards recognition of our excellence‬‬
‫• جائزة �شركة الطريان الرائدة على م�ستوى العامل – جوائز ال�سفر العاملي‬
‫‪• World’s Leading Airline – World Travel Awards‬‬
‫• جائزة الدرجة الأوىل الرائدة على م�ستوى العامل – جوائز ال�سفر العاملي‬
‫‪• World’s Leading First Class – World Travel Awards‬‬
‫• جائزة �شركة الطريان الرائدة على م�ستوى العامل – جوائز ال�سفر العاملي‬
‫‪• World’s Leading Airline to the Middle East – World Travel Awards‬‬
‫• جائزة �أف�ضل درجة �أوىل على م�ستوى العامل – جوائز �سكاي تراك�س‬
‫• جائزة �أف�ضل خدمة �أطعمة على منت الدرجة الأوىل – جوائز �سكاي تراك�س‬
‫• جائزة �شركة الطريان الرائدة على م�ستوى العامل – جملة الأعمال العربية‬
‫• جائزة �أف�ضل �شركة طريان يف العام – جوائز ال�سفر من جملة ترافيل تريد جازيت (‪)TTG‬‬
‫• جائزة �أف�ضل درجة �أعمال – منتدى ال�سفر بيز‪ ،‬ميالن‬
‫• جائزة �أف�ضل �شركة طريان لقطاع الأعمال يف العام – جوائز ال�سفر من موقع اجلارديان و�أوبزيرفر‬
‫‪• World’s Best First Class – Skytrax Awards‬‬
‫‪• World’s Best First Class Onboard Catering – Skytrax Awards‬‬
‫‪• World’s Leading Airline – Arabian Business Magazine‬‬
‫‪• Airline of the Year – TTG Travel Awards‬‬
‫‪• Best Business Class – Biz Travel Forum, Milan‬‬
‫‪• Business Airline of the Year – Guardian Observer Travel Awards‬‬
‫• جائزة �شركة الطريان الرائدة على م�ستوى ال�شرق الأو�سط – جوائز ال�سفر العاملي‬
‫‪• Middle East’s Leading Airline – World Travel Awards‬‬
‫• جائزة الدرجة الأوىل الرائدة على م�ستوى ال�شرق الأو�سط – جوائز ال�سفر العاملي‬
‫‪• Middle East’s Leading Airline First Class – World Travel Awards‬‬
‫• جائزة �أنظمة الت�سلية على منت الطائرة الرائدة يف ال�شرق الأو�سط – جوائز ال�سفر العاملي‬
‫• جائزة �شركة الطريان الرائدة يف موظفي املق�صورة على م�ستوى ال�شرق الأو�سط – جوائز ال�سفر العاملي‬
‫• جائزة التفوق يف �شبكة الإنرتنت‪ ،‬فئة �شركات الطريان – اجلوائز العربية ل�شبكة الإنرتنت‬
‫• جائزة �أف�ضل بطاقة م�شرتكة العالمة التجارية يف ال�شرق الأو�سط – جوائز البطاقات الذكية يف ال�شرق الأو�سط‬
‫• جائزة �أف�ضل �شركة طريان للرحالت الطويلة – جوائز ال�سفر الأيرلندية‬
‫• جائزة �أف�ضل درجة �سياحية – مونيتور �إيرالين جلوائز العام‬
‫• جائزة �أف�ضل وجبه على الدرجة ال�سياحية ‪ -‬مونيتور �إيرالين جلوائز العام‬
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‫‪Etihad Airways Annual Report 2011‬‬
‫‪• Middle East’s Leading Airline Inflight Entertainment – World Travel Awards‬‬
‫‪• Middle East’s Leading Cabin Staff – World Travel Awards‬‬
‫‪• Web Excellence, Airline category – Pan Arab Web Awards‬‬
‫‪• Best Co-Branded Card in the Middle East – Smart Card Awards Middle East‬‬
‫‪• Best Long Haul Airline – Irish Travel Awards‬‬
‫‪• Best Economy Class – Monitor Airline of the Year Awards‬‬
‫‪• Best Meal in Economy Class – Monitor Airline of the Year Awards‬‬
‫‪Etihad Airways Annual Report 2011‬‬
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