After 2023 revenue rebound, Etihad Airways may consider an IPO.

• Etihad Airways in Abu Dhabi is preparing for a possible Initial Public Offering in 2023 due to a 40% increase in passenger numbers and resulting revenue growth.
• On Tuesday, CNBC reported that Antonoaldo Neves, CEO of Etihad Airways Group, stated that he is preparing to be ready whenever the time comes for a possible listing.
• "Although it's not my responsibility to validate shareholder decisions, I am committed to preparing the airline for an IPO whenever the shareholders deem it appropriate. This is beneficial, even if it doesn't happen."

Etihad Airways in Abu Dhabi is preparing for a possible IPO in 2023 due to a 40% increase in passengers and revenue.

On Tuesday, CNBC reported that Antonoaldo Neves, CEO of Etihad Airways Group, stated that he is preparing to be ready whenever the time comes for a possible listing.

Reports suggest that ADQ, the Abu Dhabi-based investment company that owns Etihad Airways, is considering an IPO this year.

"Although it's not my responsibility to validate shareholder decisions, I am committed to preparing the airline for an IPO whenever the shareholders deem it appropriate. This is beneficial, even if it doesn't happen."

An IPO would allow Etihad to obtain funding for its growth and expansion plans, making it the first major Gulf airline to go public, following years of speculation about the listing of Dubai-based Emirates.

""To ensure profitability and enable the shareholder to decide whether or not to IPO, our governance is being prioritized, and management is putting in considerable effort to make our company comparable to any other publicly listed company," Neves stated."

Neves has limited losses and improved the customer experience after Etihad's ownership transfer to ADQ during the Covid-19 pandemic. The investment company has already launched several high-profile IPOs, including Abu Dhabi Ports and Pure Health.

ADQ declined to comment about possible listing plans.

TAP's former CEO, Neves, led cost-cutting measures and fleet upgrades, while Azul Airlines' CFO, Quintas, previously served as CFO of TAP and corporate treasurer at Azul.

The listing of Etihad would represent a significant milestone for the airline and regional capital markets, but it would also present a substantial challenge, including stricter financial reporting and disclosure requirements, additional compliance costs, and market pressure regarding performance targets.

Improving transparency

In 2023, Etihad reported an operating profit of $394 million, thanks to a rise in passenger numbers to 14 million and the launch of 15 new destinations and 14 new aircrafts. The surge in demand post-Covid-19 recovery propelled the company's growth.

In 2023, Etihad's total revenue increased to $5.5 billion from $5 billion the previous year, resulting in a net profit of $143 million. Although this figure is lower than that of industry leaders, Neves expressed optimism about Etihad's potential to enhance its margins and profitability, despite the challenging geopolitical environment and higher cost environment.

The airline aims to achieve revenue growth of 25-30% this year and plans to reduce costs by $100 to $150 million, yet did not provide profit estimates.

"I think we can do better," Neves said.

Boeing Concerns

Etihad's Boeing 787 wide-body customer was reassured by Neves after a door blowout on a Boeing 737-Max 9 aircraft.

"The 787 is a safe and amazing machine with a good safety record and operating standards. We are very confident about the 787 program," Neves said.

Despite his concerns, he expressed worry that the situation at Boeing could worsen delays and supply chain problems, which could affect the airline.

"Airbus planes cannot be delayed, just like regular planes," Neves stated. "We live in a world where aircraft are scarce, and the only way ticket prices will decrease is if we have more planes to increase capacity."

"There is untapped demand in the market," he added.