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MENAFN - Khaleej Times - 09/10/2012

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(MENAFN - Khaleej Times) Etihad Airways, which has expanded globally through stake purchases in firms like airberlin and Virgin Australia, will look to extend its geographical reach to India and other Asian markets.

The Gulf carrier will also look to secure more airline stakes, chief executive James Hogan said on Sunday. "Possibly one or two [partnerships] more and that will be it," he said.

Hogan said after its push into Australia with a 10 per cent stake in Virgin Australia and Europe with 29.2 per cent in Air Berlin and three per cent in Aer Lingus, the airline will now look for growth in Asia.

"We are very clear that India and Asia represent an opportunity," said Hogan.

He said the airline has been receiving offers from Indian carriers.

"We get a number of options. It has to meet our formula. We are in no rush. We have to make sure that it makes sense from a network, operation and revenue perspective."

Hogan said more opportunities may also emerge in Europe after the airberlin stake purchase.

Etihad on Sunday posted a 19 per cent increase in third-quarter revenues to 1.3 billion as passenger numbers surged 23 per cent due to code-share deals and partnerships with other airlines.

The Abu Dhabi-based airline is confident to achieve 10 million passengers this year as seat factors also improved 0.4 per cent to 81.2 per cent during the quarter.

The rise in revenues continues to outperform the airline's growth in capacity and it remains confident of achieving full-year profitability for the second year running. However, the airline didn't reveal the third-quarter profit figures.

Hogan said the third quarter saw continued progress across the business. "With all key indicators showing strong performance and we remain confident of delivering full-year profitability based on current market conditions," Hogan said. Passenger revenues were boosted by codeshare and partner revenues, which jumped 51 per cent to 182 million. The airline's 38 partners helped to create a total network of 315 destinations, more than any other Middle Eastern carrier.

A significant contribution came from airberlin, in which Etihad Airways holds a 29.21 per cent equity stake. The two airlines' extensive codeshare and joint marketing agreements have delivered 51 million in revenues to Etihad Airways year-to-date, surpassing the initial full-year estimates.

Air Seychelles, in which Etihad holds a 40 per cent stake, continues to grow revenues through increased frequencies and codeshares. Air Seychelles is also reducing costs and it remains on track to break even in 2012, in the first year of Etihad Airways' five-year management contract, confirming a dramatic turnaround in the airline's economic fortunes after several years of heavy losses.

Virgin Australia, in which Etihad Airways now holds a 10 per cent stake, continued to deliver a strong contribution, with codeshare revenues to Etihad Airways up 16 per cent year-on-year. The airline has 80 per cent of its fuel hedged at price levels well below current market prices with 21 leading international financial institutions for the remainder of 2012, as part of a three-year rolling hedging programme.

James Hogan said the airline continues to "face an incredibly tough operating environment."

He said fuel prices remain high and the global economy still carries challenges and the eurozone remains in trouble and there is still some softness in a number of Middle Eastern markets.

The growth of the network will be further supported by the delivery of three new aircraft in the next three months including two Airbus A320s and one three-class Boeing 777-300ER. In 2013, 14 aircraft would join the airline to boost its expansion. "Over the next seven to eight years, we are taking another 100 aircraft. So we will also continue to grow organically and continue with our code-share agreements," Hogan said.


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