Etihad Airways Cancels A350 Orders & Set To Outsource Lounges To Scale Back & Cut Costs

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The carrier of the UAR flag, Etihad announced that they were set to cancel all orders for the A350 and to start outsourcing the Austrian lounges in an attempt to cope with the financial issues and cut the costs.

Struggles in the Gulf

The media got flooded with reports of airlines struggling with money this month. The Etihad Airline seems to be facing some financial pressures as well.

Etihad plans to cancel its order of  275 aircrafts which it made in June this year when the airline was planning its aggressive expansion. The order included:

  • Airbus A350: 62
  • Boeing 787: 52
  • Boeing 777: 26
  • Airbus A321neo: 26
  • Airbus A320neo: 10

Nevertheless, evaluating its current financial situation and in view of projected losses in the coming years, Etihad is set to change its initial plan and scale back.

During the past couple of years the airline has implemented many measures to decrease the costs. The airline blames its current financial situation to the bad investment decision made earlier on with Alitalia and Airberlin.

In 2016 Etihad reported a loss of $1.87bn while in 2017 it reported $1.52bn in losses. In June 2017, the airline tried to cancel and defer 25 planes 777Xs from their order with Boeing. During the same month, many pilots were transferred to Emirates. In total 4150 employees have been removed from the carrier since 2016.

They also canceled their delivery of the A350 simulator which suggests that they knew they would never use the A350’s.

Etihad to Outsource Lounges at Airports to Other Airlines

Etihad will also allow other airline passengers to use its airport lounges upon payment of $40 or more, a facility previously available only to premium passengers.

It is expected that many Gulf airlines that are currently facing such financial difficulties might start thinking and discussing mergers and acquisitions in the near future.