Abu Dhabi's Etihad Airways Aims to Announce IPO This Week - Sources

Abu Dhabi's Etihad Airways is set to announce its initial public offering (IPO) this week, according to sources familiar with the matter. The airline, owned by the Abu Dhabi Developmental Holding Company (ADQ), is expected to list on the Abu Dhabi Securities Exchange (ADX) and potentially other international exchanges.

The IPO is expected to be one of the largest in the Middle East, with a valuation of around $7 billion, according to sources. Etihad Airways has been preparing for the IPO for some time, with the airline's CEO, Antonoaldo Neves, stating in March that the company was "working hard on its readiness to be listed" when its shareholder ADQ decides.

Etihad Airways has seen strong financial performance in recent years, with a net profit of AED 525 million (U.S.$ 143 million) in 2023, up from AED 350 million (U.S.$ 95 million) in 2022. The airline also reported an operating result of AED 1.4 billion (U.S.$ 394 million) in 2023, reflecting a significant improvement in passenger business profitability.

The airline's revenue has also grown, reaching AED 20.3 billion (U.S.$ 5.5 billion) in 2023, compared to AED 18.3 billion (U.S.$ 5.0 billion) in 2022. Etihad Airways carried 14 million passengers in 2023, up ~40% from the year before, with an overall load factor of 86%, compared to 82% in 2022.

Etihad Airways has also been expanding its fleet and network, launching 15 new destinations in 2023 and adding 14 aircraft to its fleet. The airline plans to double its fleet by 2030 and launch eight to 10 destinations a year.

The IPO is expected to help Etihad Airways raise capital to fund its growth plans and diversify its ownership. The airline has been working with investment banks, including BNP Paribas and Morgan Stanley, to prepare for the IPO.

However, there are potential risks and challenges associated with the IPO, such as market conditions, valuation, regulatory and operational risks, liquidity, dependence on a single market, and ESG risks. Investors should carefully consider these factors when evaluating the IPO.

In conclusion, Etihad Airways' IPO is an important development for the airline and the Abu Dhabi stock market. The IPO is expected to raise significant capital for the airline and provide an opportunity for investors to participate in its growth story. However, investors should carefully consider the potential risks and challenges associated with the IPO before making an investment decision.