Etihad Airways, the national carrier of the UAE has reported a loss of $1.28 billion for the year 2018 as against a loss of $1.52 billion in the previous year.

The airline also announced an improvement in core operating performance of 15% in 2018, 7% higher than forecast, on revenues of $5.86 billion (2017: $6.0 billion).

Since commencing its five-year transformation program in 2017, the airline has improved its core operating performance by 34% despite challenging market conditions and effects of an increase in fuel prices.

Etihad carried 17.8 million passengers in 2018 (2017: 18.6 million), with a 76.4% seat factor (2017: 78.5%) and a decrease in passenger capacity (Available Seat Kilometers - ASK) of 4% (from 115.0 billion to 110.3 billion).

The airline increased yields by 4%, largely driven by capacity discipline, network and fleet optimization and growing market share in premium and point-to-point markets. Passenger revenues remained steady at $5.0 billion.

Etihad Cargo recorded a strong performance for the year largely due to a lower cost base, a program of efficiency improvements including the consolidation of the freighter fleet around the Boeing 777F, and a refreshed network focusing on core trade lanes leveraging Abu Dhabi’s geographical position to maximize freighter to belly-hold flows.

Cargo revenue for the year was $827 million (2017: $877 million) with 682,100 leg tonnes carried (2017: 853,300 tonnes). Cargo Freight Tonne Kilometres (FTK) decreased by 21% (from 4.3 billion to 3.4 billion), with a 15.5% increase in yields.

The airline significantly reduced total costs by $416 million to $6.9 billion (2017: $7.3 billion). Direct operating costs were reduced by $226 million (3.6%) despite ongoing fuel price volatility. Administration and general expenses declined by $190 million (19%), mainly driven by lower indirect manpower and other administration costs.

Tony Douglas, Group Chief Executive Officer of Etihad Aviation Group, said: “In 2018, we continued to forge ahead with our transformation journey by streamlining our cost base, improving our cash-flow and strengthening our balance sheet.”

“Our transformation is instilling a renewed sense of confidence in our customers, our partners and our people. As a major enabler of commerce and tourism to and from Abu Dhabi, we are intrinsically linked to the continued success of the emirate,” he added.