Estimated read time: 3-4 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
DUBAI, United Arab Emirates (AP) - Gulf-based carrier Etihad Airways posted on Monday its largest annual profit yet, with $62 million in net earnings last year.
The national carrier of the United Arab Emirates said profits were up 48 percent from $42 million in 2012, and that revenue rose 27 percent to $6.1 billion. Etihad's revenues shot up 30 percent in cargo to almost $930 million last year.
Chief Executive Officer of Etihad Airways James Hogan told The Associated Press in an interview that this year showed "the best results so far".
Etihad, which was set up in 2003 and is based in the United Arab Emirates' capital Abu Dhabi, is among the world's fastest growing airlines. It and its Gulf rivals, the Dubai-based Emirates and Qatar Airways, are increasingly challenging older airlines in the battle for long-haul international passengers as they compete for routes and critical stopover traffic between Asia and Europe and the Americas.
The Gulf airliners' spending power and success have spooked other airlines around the world.
Etihad alone announced $67 billion in orders for up to 199 new aircraft in November. Included in that order were 56 wide-body Boeing aircraft with options and purchase rights for an additional 26. That deal was worth $25.2 billion at list prices.
Australia's Qantas Airways, a rival of a company part-owned by Etihad, last week posted a first-half loss of $211 million and said it would cut 5,000 jobs. Qantas, complains that its main competitor, Virgin Australia, has cheaper access to capital because of its state owners. Virgin Australia is 64 percent owned by three state-owned carriers: Air New Zealand, Etihad Airways and Singapore Airlines.
There are also concerns in the United States that Etihad's expansions, along with other Gulf carriers, have taken business away from American airliners.
Some U.S. pilot associations have criticized a new U.S. Customs preclearance facility that began operating in Abu Dhabi in late January, saying it only benefits Etihad. The facility lets passengers avoid immigration and customs lines on arrival by screening them ahead of their departure.
Etihad says it will be flying to five U.S. destinations by the end of 2014.
Hogan defended Etihad's aggressive expansion, saying that large purchases of Boeing aircraft have helped the U.S. aviation industry.
"In a global business environment, business models continue to change and the more established carriers have traditionally worked their global alliances," he said. "We have a different approach. That's business. At the end of the day the customer will decide who wins, who loses."
Etihad says its investments in other airlines and codeshare program were key to last year's growth.
The airline has codeshares with 47 partners that allow passengers to fly on routes operated by multiple carriers on a single ticket.
Etihad also owns stakes in Air Berlin, Air Seychelles, Ireland's Aer Lingus and India's Jet Airways. Etihad Airways says it is waiting for regulatory approval for two more investments, a 49 percent stake in Serbia's national carrier, Air Serbia, and a 33.3 percent shareholding in Darwin Airline, a regional carrier based in Switzerland.
Hogan said Etihad officials will decide in the coming weeks whether the airline will also take a stake in the struggling Italian carrier Alitalia.
He said investing in these airlines has helped Etihad enter markets and increase its presence worldwide.
(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)