Fitch Expects Etihad Airways to Keep Losing Money Through 2022

(Bloomberg) -- Etihad Airways will continue losing money through 2022, Fitch Ratings forecast, citing the “high execution risk” in the state-owned carrier’s turnaround plan.

The credit ratings company affirmed the airline’s long-term rating at ‘A’ with a stable outlook, given the support provided by the government of Abu Dhabi, Etihad’s owner.

“We continue to rate Etihad three notches below its ultimate sole shareholder Abu Dhabi, despite the change in criteria,” the company said in a statement Wednesday.

Fitch expects Etihad to remain the smallest among the three Persian Gulf carriers, including Emirates and Qatar Airways. Despite cost advantages compared with British Airways, Deutsche Lufthansa AG and Air France-KLM, Etihad’s unit revenue is lower than that of Emirates and European peers, Fitch said, citing “very weak” financials.

Click here for more on Etihad’s plans to cut costs and boost cash flow

Etihad posted a $1.52 billion core airline loss for 2017, extending losses at the main airline unit to almost $3.5 billion in the past two years. The airline plans to reduce capacity by 2.4 percent in 2018 after posting 1 percent growth last year.

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