Etihad boss would trade compensation for on-time plane deliveries

Etihad Airways chief executive Antonoaldo Neves at Arabian Travel Market in Dubai. Victor Besa / The National

Compensation from plane makers for delayed deliveries does not make up for how the shortage of seats hurts passengers, Etihad Airways’ chief executive has said.

The airline is due to receive about 15 Airbus and Boeing aircraft in 2024 which are already late by between six months and a year, Antonoaldo Neves told The National at Arabian Travel Market in Dubai.

“Compensations are expected because they are contractual and they are going to come,” he said. “And when they come, great. But it’s sad to be honest because who pays the bill in the end?” He pointed out that the shortage of planes and continued strong travel demand has led to an industry-wide rise in ticket prices.

“I would trade all the compensations for planes on time,” he said. “Compensations don’t move the needle … every airline in the world would trade compensation for planes to make money.”

The airline is scheduled to received next year 15 wide-body and narrow-body aircraft that are a combination of Airbus A350s, A321 Neos and Boeing 787s.

“We will take about 15 planes, a little bit less or a little bit more, depending on if the OEMs [original equipment manufacturers] are on time,” Mr Neves said.

“They are already late, some by one year and some by six months.”

Mr Neves’s comments echo similar concerns raised by global airline executives about the supply chain woes that continue to roil the industry.

Emirates is “not happy” with the long delays to Boeing’s 777X wide-body programme and expects the US plane maker’s new management to fix the issues, chairman and chief executive Sheikh Ahmed bin Saeed said on Tuesday.

Boeing and Airbus are struggling to increase production quickly enough to meet soaring post-pandemic demand for new aircraft.

The aviation supply chain is facing several challenges such as a shortage of parts, shortage of skilled workers, aircraft certification hold-ups and, in Boeing’s case, increased regulatory scrutiny. The US plane maker is grappling with a widening crisis after a door panel flew off an Alaska Airlines 737 Max 9 jet in mid-flight.

Profitable first quarter

Etihad recorded a strong performance in the first quarter and expects to make a profit, Mr Neves said.

“We had an amazing quarter. Things are really coming together. We’re going to make a profit in Q1, which is something that is not common in the industry. Most airlines lose money in Q1,” he said.

Etihad in March said it was preparing for a potential listing – a first for a major Gulf airline – as it pursues an ambitious growth strategy between now and 2030. However, any decision about a possible listing would be made by Etihad Airways’ owner, Abu Dhabi holding company ADQ.

In the second quarter of this year, the airline will add six leased Airbus A321 Neo aircraft to its fleet for the first time, Mr Neves said.

The narrow-body planes will be deployed on routes in the Gulf and India.

“Q1 and Q2 are two quarters where things are coming together and everything we invested last year is coming to fruition,” Mr Neves said.

The outlook for summer travel is bright with “very strong” forward bookings for travel in June, he added.