An Airbus A380-800 jet airliner operated by Etihad Airways, on display at the Dubai Airshow 2017 international aerospace event.
Marina Lystseva | TASS | Getty Images
Etihad Airways on Wednesday revealed a $7 billion investment plan over the next five years in a bid to “double the size of the airline until 2030.”
Speaking to CNBC’s Dan Murphy, Etihad’s Group Chief Executive Officer Antonoaldo Neves revealed passengers should expect “a totally different airline” within the next two to three years.
Much of the $7 billion will go into revamping its existing fleet of planes, as well as the purchase of new aircraft further down the line, he said. The Abu Dhabi-based airline currently has 92 planes operating. But Neves is aiming for the skies, with the hope of having up to 170 planes by the end of the decade.
The expanded network of planes will allow the company to offer more “convenient” time slots for passengers traveling to Europe and Southeast Asia who want to travel at 2 p.m. in the afternoon rather than in the early hours of the morning, he said.
Neves said Etihad will begin retrofitting and revamping “dated” Boeing 777 planes from 2026 onward, this is due to what he described as “the constraints that we have in the global aviation market.”
“There are no planes available,” he said.
The purchase of new planes, the retrofitting of the Boeing 777s, boosting the number of business class seats and replacing existing in-flight WiFi with stronger connectivity are all priorities for the United Arab Emirates-based airline.
“The product is extremely important, and customer service extremely important,” said Neves.
The opening of Abu Dhabi’s new terminal in November last year, which Etihad operates 16 flights a day from, has already strengthened thr company’s competitive advantage, Neves believes.
Two years ago, the airline saw 10 million passengers onboard. Since the start of the year, the airline has already had 18 million passengers.
A drive to improve profitability comes amid speculation about a possible IPO in 2025.
Neves said no decision has been made on when, not if, the airline goes to market.
“It’s really important for airlines to be listed, right? Because in the end, although we don’t need cash in the next five to six years to deploy the $7 billion capital. One day, if we decide to accelerate, to grow even more, we may need capital and having the ability to tap into different sources of capital to finance our growth may be important in the future,” said Neves.
Etihad is “working hard to be ready” for an IPO listing, adding that it was “no secret to anyone” that the firm’s sovereign wealth fund shareholder ADQ, fully owned by the Abu Dhabi government, is “investing very heavily in their companies to be ready to lead to be listed.” ADQ is the smallest of Abu Dhabi’s three sovereign wealth funds and is chaired by Sheikh Tahnoon bin Zayed al-Nahyan, the brother of the UAE’s current president.
In a report published by Reuters, Etihad Airways could make its stock market debut no sooner than 2025. According to its sources, geopolitical instability in the region could also influence the timing of any announcement. The war in Gaza and escalating tensions between Israel and Lebanon present new problems for the Gulf region.