Etihad Airways, based in Abu Dhabi, is set to delay its stock market launch until at least 2025, according to two sources familiar with the situation. This move could mark the first initial public offering (IPO) of a significant Gulf airline as the UAE capital intensifies its efforts to establish itself as a global travel center.
The airline, which is owned by the sovereign wealth fund ADQ, had initially contemplated going public this year. However, it aims to present investors with robust financial results for 2024, as one source indicated. Additionally, ongoing geopolitical tensions in the region have influenced the timing of the IPO, according to the second source.
ADQ has chosen not to comment on the matter. Meanwhile, a representative from Etihad stated that the airline "does not comment on rumors or speculation."
Since its inception in 2003, Etihad has invested heavily in acquiring minority stakes in various airlines to enhance its network through the Abu Dhabi hub and to better compete with Gulf rivals Emirates and Qatar Airways. However, this strategy faced challenges as several of those airlines encountered financial difficulties.
Following a management overhaul and a period of scaling back operations, Etihad has seen growth under the leadership of new CEO Antonoaldo Neves.
As part of its "Journey 2030" initiative, the airline aims to strengthen Abu Dhabi's position as a travel hub linking Asia and Europe. The goals include increasing its destination count to over 125 airports by 2030, up from more than 70 currently, and expanding its fleet to over 160 aircraft from approximately 90 at present.
Last year, Abu Dhabi's Zayed International Airport inaugurated a new terminal costing several billion dollars, which has increased its annual capacity to 45 million passengers.
"Our objective is straightforward: to provide exceptional customer service and ensure sustainable profitability, which will support Etihad's role in fulfilling Abu Dhabi's ambitions," Neves stated in a November interview.
Recently, the airline announced a 48% rise in its half-year after-tax profits, with passenger numbers climbing 38% to reach 8.7 million. This follows a successful year with net profits recorded in both 2022 and 2023.
In March, Neves informed Reuters that Etihad is enhancing its transparency, governance, and financial standing in preparation for a potential IPO, contingent on ADQ's decision to proceed with the listing.
Etihad is also experiencing delays in the delivery of new aircraft from manufacturers Airbus and Boeing, which has compelled some airlines to adjust their growth strategies.
This situation arises during a surge in international travel post-pandemic, which Gulf governments are leveraging to implement reforms aimed at diversifying their economies beyond fossil fuels.
These reforms include the privatization of state-owned assets, such as airlines, and a possible listing of Etihad would contribute to the recent wave of IPOs in the region.
In 2021, the president of Emirates, a larger competitor, mentioned that the Dubai government was contemplating an IPO for the airline, while Flynas in Saudi Arabia is aiming to go public as early as this year, according to Bloomberg. Flynas has not yet responded to requests for comment.