Etihad adds billions for Abu Dhabi economy, study shows

James Hogan, the chief executive of the Etihad Aviation Group, says 'success for Etihad Airways translates directly into success for Abu Dhabi'. Delores Johnson / The National

Etihad Aviation Group (EAG), the Abu Dhabi airline holding company, will contribute as much as US$9.6 billion to the emirate’s economy this year.

Oxford Economics Group, the UK-based consultancy, has calculated that Etihad and its seven global equity partners will add $7.4bn to GDP from its core activities and a further $2.2bn through tourism.

The aviation group’s core operations support 62,100 jobs in Abu Dhabi, with another 29,600 from its contribution to tourism.

This contribution will rise to $18.2bn by 2024.

The study underlines the growing importance of aviation in the capital. Oxford said: “Etihad’s impact in Abu Dhabi is a vital driver of prosperity for the emirate, the importance of which is set to grow in the next decade as the airline expands its service, bringing more visitors to the region.”

James Hogan, EAG’s recently appointed chief executive, said: “Success for Etihad Airways translates directly into success for Abu Dhabi – and success for the wider group and its partners boosts that impact even further.

“As a major jobs creator and as a major spender with local suppliers, Etihad Aviation Group has had an increasingly positive impact on the Abu Dhabi economy, year after year.

“These are long-term, sustainable jobs which make a long-term, sustainable contribution to GDP. As our equity airline partners continue to expand their connectivity with Abu Dhabi, we are seeing even greater impacts on the local economy.”

The air connectivity offered by Etihad and its partners will boost Abu Dhabi productivity by $17bn this year, equivalent to 5.9 per cent of the emirate's GDP and 195,600 jobs. This contribution to productivity will reach $27.1bn by 2024, the study said.

EAG was set up in 2014 to consolidate the aviation and other operational activities of Etihad into one holding company. It has four divisions – the airline, engineering, loyalty and tourism and the operations of the seven equity partner airlines.

The seven airlines and Etihad add up to the seventh-largest aviation grouping in the world. Together, they carry 114.8 million passengers to more than 600 destinations on a fleet of 718 aircraft, served by 73,660 employees.

The Oxford study is a vindication of the equity partners strategy. Mr Hogan said: “Our two-pronged approach is delivering results for EAG and for Abu Dhabi.

“At a strategic level, our equity partners bring network connectivity, generate additional revenues and create economies of scale. Every one of our partners is delivering on this level.

“Each partner also has its own business goals, which are the responsibility of their own management and directors. Many of these, such as Air Serbia, Air Seychelles, Jet Airways and Virgin Australia, are now delivering profitably on this level.”

The investment in Alitalia is well on track, cutting losses by more than expected in the first full year, Mr Hogan said.

“Airberlin has faced greater challenges and has taken longer than we expected to reach sustainable profitability, but the underlying fundamentals of the business are trending in the right direction. In addition to the revenue contribution from airberlin to Etihad Airways, which is significant, the Oxford study shows that our investment is also having a strong impact on Abu Dhabi,” he said.

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