Etihad Chooses Self-Funded Growth as Fuel Costs Squeeze Margins

Jet fuel has climbed into the center of Etihad Airways’ expansion plans, forcing the Abu Dhabi carrier to balance a fast-growing network against a cost it cannot easily pass on to passengers.

Chief Executive Officer Antonoaldo Neves said the airline is using fuel hedges to soften the impact of higher prices, but fierce competition among Gulf carriers is keeping fares broadly in check. That leaves Etihad absorbing more of the shock when refined fuel costs rise, even as demand remains strong. The global average jet-fuel price recently reached $181.46 a barrel, according to the International Air Transport Association.

The pressure is arriving as Etihad accelerates. The airline expects to break even in 2026, reversing an earlier concern that regional conflict and longer flight paths could produce a loss, The National reported. Aircraft are running at roughly 90% occupancy, Etihad posted a profit in August, and July capacity was 15% above the year-earlier level. The carrier plans to lift daily flights from about 320 to roughly 400 by the end of 2027, with China and Africa among its main growth targets.

That recovery follows a record 2025. Etihad reported AED2.6 billion, or about $698 million, in profit after tax, up 47% from the previous year. Revenue rose 21% to AED30.7 billion, while the airline carried 22.4 million passengers and ended the year with 127 aircraft. Operating cash flow of about AED8 billion helped fund capital spending without an immediate need for outside equity, according to company results cited by The National.

That explains Neves’ position on a potential initial public offering. Etihad has no current IPO plans, he said, arguing that internal cash generation can finance the airline’s next phase. The company is privately held under Abu Dhabi’s ADQ, which received full ownership of Etihad Aviation Group in 2022.

The strategy is capital-heavy. Etihad says it plans to invest $20 billion in aircraft and customer experience, including 15 new A330s entering service over five years from September 2027. The risk is straightforward: if fuel stays elevated while fares remain constrained, growth will bring passengers and revenue, but not necessarily the margin expansion investors would expect from an IPO candidate.