Abu Dhabi’s Etihad Airways is gearing up for a possible preliminary public providing after rising income in 2023 on the again of a 40% enhance in passenger numbers.
Requested a few attainable itemizing, Etihad Airways Group CEO Antonoaldo Neves advised CNBC on Tuesday, “I am working to be prepared, every time it is the time.”
Speak of an IPO has been swirling after it was reported that ADQ, the Abu Dhabi-based funding firm that owns Etihad Airways, was in discussions with banks about going public as quickly as this 12 months.
“It is not for me to substantiate the shareholder choices,” Neves mentioned, whereas additionally signaling efforts to organize the airline. “It is our obligation to be able to IPO the corporate every time the shareholder believes it’s the proper time… and that is good, even should you do not do it.”
If it materializes, an IPO would allow Etihad to faucet capital markets to fund future progress and enlargement plans. It could additionally make it the primary main Gulf provider to change into publicly traded, after years of hypothesis surrounding the itemizing of Dubai-based rival Emirates.
“We’re working very onerous, in order that our governance is high notch… in order that profitability is on the degree that the shareholder can resolve to IPO or to not IPO,” Neves mentioned, including that “administration are placing plenty of effort in place in order that the corporate could be in comparison with some other firm that’s listed.”
Since becoming a member of the airline in 2022, Neves has restricted losses and invested within the buyer expertise after Etihad’s possession switch to ADQ in the course of the Covid-19 pandemic. The funding firm has already launched quite a lot of high-profile IPOs lately, together with Abu Dhabi Ports and Pure Well being.
ADQ declined to remark about attainable itemizing plans.
Neves has beforehand led value chopping and fleet upgrades at Portuguese nationwide airline TAP and introduced Azul Airways public in New York in 2017. Etihad’s CFO Raffael Quintas additionally served as CFO of TAP and as company treasurer at Azul.
A list would mark a big step for Etihad and regional capital markets, however stays a hefty hurdle. Going public would topic the airline to stricter monetary reporting and disclosure necessities, extra compliance prices and market strain surrounding efficiency targets.
Bettering transparency
Etihad on Wednesday reported it achieved an working revenue of $394 million in 2023, pushed by a surge in passenger numbers to 14 million final 12 months. The corporate launched 15 locations and added 14 new aircrafts within the interval, on the again of ongoing restoration in post-Covid-19 demand.
Complete income was $5.5 billion in 2023, up from $5 billion within the earlier 12 months. Web revenue was simply $143 million. Whereas the determine is modest in comparison with business giants, Neves mentioned he was optimistic about Etihad’s capability to broaden margins and profitability, regardless of a difficult geopolitical backdrop and increased value surroundings.
The airline expects income progress of 25-30% this 12 months and is concentrating on between $100 to $150 million in value cuts, however did not provide steerage on revenue estimates.
“I feel we are able to do higher,” Neves mentioned.
Boeing Considerations
Neves additionally sought to reassure the flying public about Etihad’s Boeing fleet after a door blowout on a Boeing 737-Max 9 plane. He mentioned Etihad doesn’t fly the plane in query, however it’s a important Boeing 787 wide-body buyer
“We actually belief the 787. It is a protected aircraft. It is a tremendous machine. It is among the finest machines flying at present. The protection file is sweet. The working requirements are good. We’re very assured in regards to the 787 program,” Neves mentioned.
He nonetheless expressed concern that the scenario at Boeing may exacerbate delays and provide chain points that might affect the airline.
“You can’t delay planes… and that goes for Airbus as nicely,” Neves mentioned. “Delays after delays after delays – we stay at present in a world the place an plane has change into a scarce useful resource … The one manner tickets are going to go down is that if we’ve got extra plane, so that may deploy extra capability.”
He added, “The fact is there’s untapped demand out there.”
