Etihad Airways yesterday announced its 2016 financial results, recording a net loss of US$ 1.87 billion with one-off impairment charges and fuel hedging losses took its toll on the airline.

Other factors that contributed to the loss were charges on assets and financial exposures to equity partners, mainly related to Alitalia and airberlin which amounted to US$ 808 million.

According to the airline, while its core airline business achieved steady passenger revenues of US$ 4.9 billion and 79% load factors while carrying a record 18.5 million passengers, yields fell 8% amid market capacity pressures and the tough global economic climate.

Etihad Airways also said that a slowdown in the cargo market also put increased pressure on cargo revenues and yields.

Speaking on the loss, Peter Baumgartner, CEO of Etihad Airways said “We are in an industry characterized by overcapacity, declining market sizes on key routes, and changing customer behaviour as a weak global economy affects spending appetite.

“Our answer to these challenges is innovation and reinvention, and this gives Etihad Airways a competitive edge as we seek to leverage opportunities offered to us by a changing environment" he added.

A Skytrax 5-Star airline, Etihad Airways is a flag carrier and the second-largest airline of the United Arab Emirates. It commenced operations in November 2003.

With a fleet of 126, the airline operates more than 1,000 flights per week to over 120 passenger and cargo destinations in the Middle East, Africa, Europe, Asia, Australia and the Americas.