By Layan Odeh, Bloomberg – Feb 14, 2019 10:00 am
Etihad Airways slashed orders worth $21.4 billion at list prices for Boeing Co. and Airbus SE jetliners, pushing forward with a drastic restructuring after years of operational losses.
The state-owned Gulf carrier cut its order for Boeing 777-9 aircraft to 6 jets from 25, while canceling delivery of 42 Airbus A350 wide-bodies, leaving it with 20. While the airline will continue receiving Boeing 787 Dreamliners, Etihad said it’ll decide what to do with the rest of the original order later, “through rescheduling, restructuring or reduction.”
With the cancellation of $1.1 billion worth of A320neos last month, Abu Dhabi-based Etihad has taken $22.5 billion of orders off the table for the plane-manufacturing duopoly. The figures don’t include customary discounts that lower final prices. Airbus announced the loss of the A350s, a modern wide-body, on Thursday when it said it would shut down the older A380 superjumbo program after a dozen years.
“This will enable the airline to further progress its transformation and adjust to its new operating model,” Etihad said in a statement. The airline “can now concentrate on the phased introduction of new aircraft types, enabling an efficient rationalization of its fleet, and building a network that connects Abu Dhabi to the world.”
The airline has cut thousands of positions, put the brakes on a costly expansion and scrapped marginal routes, after almost $3.5 billion in losses in over two years. The airline is also being sued over an August 2017 decision to cut financial support for defunct German carrier Air Berlin.
Etihad has 43 unfilled orders from the 787 family, according to Boeing’s January monthly report.
©2019 Bloomberg L.P.
The Bottom Line:
Etihad Airways, based in Abu Dhabi, decided to cut orders for Boeing Co. and Airbus aircraft. The wish to restructure their planes, after having witnessed several years of losses in operations.
- The company faced legal issues in 2017, due to a reduction in the financial department for the now-extinct Air Berlin.
- Etihad Airways is part of a transformation process, also is implementing a new operating model.
- The airline with the budget decision will have the opportunity to introduce new types of planes in the market.
- Etihad Airways will venture into the network that will connect Abu Dhabi to different destinations around the world.
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