Etihad ramps up its operations

Abu Dhabi-based carrier signs major aircraft financing deal and announces big growth in cargo operations.

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By  David Ingham Published  February 5, 2006

Etihad Airways has entered 2006 with a bang, announcing a major financing deal and significant growth in its cargo operations. The Abu Dhabi-based carrier has concluded financing arrangements worth US $450 million that will help pay for the purchase of five new Boeing 777-300ER aircraft. Meanwhile, Etihad Crystal Cargo reported turnover of nearly US $100 million in 2005, only its second year of operation. The financing deal was made with National Bank of Abu Dhabi, Abu Dhabi Commercial Bank, First Gulf Bank and HSBC Bank Middle East as mandated lead arrangers, with Abu Dhabi Investment Company as lead arranger. The money will allow Etihad to take out a 12-year operating lease on the five Boeing planes. “This ground-breaking deal demonstrates Etihad’s continued growth in fleet size and our deepening relationship with the domestic and international banking sector,” said Robert Strodel, CEO, Etihad Airways. “Strengthening our ties with these banks will help us finance a number of Etihad’s future aircraft deliveries and continue to develop our global presence.” The 777-300ER extends the 777 family’s capabilities, bringing twin-engine efficiency and reliability to the long-range market. The airplane carries 365 passengers up to 7,880 nautical miles (14,594 kilometres). The first of the new aircraft was due to arrive towards the end of January. The planes will help the airline service new passenger and cargo destinations. Etihad Airways currently offers commercial flights to 20 destinations worldwide and Etihad Crystal Cargo serves a handful of additional routes with cargo-only flights. Like many airlines, Etihad is seeing strong growth in its cargo business. Etihad Crystal Cargo, its dedicated cargo division, achieved turnover of nearly US $100 million in 2005, a solid performance from a division that was only launched in January 2004. In 2005, Etihad Crystal Cargo carried 70,000 tons of cargo and employee productivity reportedly reached US $250,000 per head. In 2004, the division transported just 20,000 tons of cargo. “In the past year, Etihad Crystal Cargo has become a name well known in the cargo industry,” said Ingo Roessler, vice president, cargo, Etihad. “We are very proud of the achievements we made in this short time.” Frankfurt became the first all cargo destination for Etihad in February 2005, followed by Milan, Mumbai, Chennai, Calcutta, New Delhi and Khartoum. Since March, Crystal Cargo has operated more than 100 worldwide charter services. Recent upgrades of cargo facilities at Abu Dhabi International Airport will further boost Etihad Crystal Cargo’s capabilities. A deal with Frankfurt-based Traxon, a joint venture between Air France and Lufthansa Cargo, should also help improve Crystal Cargo’s service levels by facilitating electronic communication with clients. With Traxon’s e-Air Waybill (FWB), e-Consolidation list (FHL), e-Status Update (FSR/FSA) and e-Status (FSU) services, forwarders can be systematically informed about the status of Crystal Cargo shipments.

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