Corona deepens the losses of the UAE “Etihad”

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The corona virus outbreak deepens the UAE airline crisis, which has been suffering from continuous losses during the past four years, due to its failed investments in Europe and the decline in travel to and from the UAE with the decline in economic growth and the decrease in the movement of corporate employees.The Union, which is owned by the Abu Dhabi government, said today, Thursday, that it recorded a net loss of $ 870 million in 2019, down from $ 1.28 billion in 2018 and $ 1.52 billion in 2017.

In a statement, it stated that the decrease in losses was driven by an increase in seat occupancy by 78.7% and transportation of 17.5 million passengers.

Al-Ittihad asked the aircraft crews to take paid leave, and it appears that the outbreak of the Corona epidemic is threatening the company with more losses, which means deepening the financial crisis of the air carrier.

The International Air Transport Association (IATA) said on Thursday that airlines may lose 63 to 113 billion dollars in global passenger revenue in 2020, based on the prevalence of Corona.

Brian Pierce, chief economist of the union in Singapore, added that the last time the sector faced such a shock was in 2009 during the global financial crisis.

Iata said that the perception of a loss of $ 63 billion is based on the assumption that the disease will be confined to the current markets, which have more than 100 registered cases, as of the second of March, and that the higher loss is based on expectations of the spread of the disease on a larger scale. This decline would mean that global passenger transportation revenue fell between 11 and 19 per cent. The International Air Transport Association said on February 20 that the outbreak would cost airlines $ 29.3 billion in revenue, if the outbreak was largely confined to China’s associated markets.

Total Etihad Airways revenue in 2019 fell 4.4% to $ 5.6 billion, down from $ 5.85 billion in 2018. The company indicated that it cut last year’s losses, which could have been greater than $ 870 million.

Commenting on the results, Tony Douglas, CEO of Etihad Aviation Group said: “It is positive thanks to the adoption of innovative ways and solutions in our operations.” The loss recorded in 2019 is the fourth in a row for the national carrier of the Emirate of Abu Dhabi.

By the end of 2019, the company had 101 aircraft, consisting of 95 passenger aircraft and six cargo planes with an average age of 5.3 years, while the company had 76 destinations.

Etihad Airways incurred about 8 billion euros, or about 9.3 billion dollars, in losing partnerships with European airlines over the past years. Among these losses, two billion euros (about 2.34 billion dollars) in Air Berlin alone, according to German data.

Air Berlin went bankrupt in 2018, in which Etihad held a 29% stake, and owned 49% of the Italian airline, Alitalia, which was bankrupted twice.

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