Summary
- Etihad may go public with an IPO listing soon, boosting visibility and access to capital.
- ADQ is exploring listing the carrier, discussing potential deals with banks, based on Bloomberg.
- Other airlines within the Gulf region, like Emirates and flynas, have also considered going public.
The UAE-based carrier Etihad is reportedly considering going public with the planned IPO listing as soon as this 12 months. Based on a report by Bloomberg, the considerations across the IPO listing are ongoing, and details comparable to the dimensions and timing of any listing are still undecided.
ADQ, an Abu Dhabi state-controlled sovereign wealth fund, owns Etihad. ADQ is currently exploring the potential of listing the carrier. Based on Bloomberg sources aware of the matter, discussions have already taken place with banks regarding a possible deal.
Easy Flying reached out to Etihad, however the airline declined to comment on this matter.
What happens when an airline goes public?
An IPO, or initial public offering, happens when a privately held company decides to list its shares on a stock exchange, enabling the general public to buy them.
Photo: Etihad Airways
Becoming publicly traded via an IPO can significantly boost an organization’s visibility. This increased exposure not only lends credibility and prestige but additionally strengthens their bargaining position with lenders, potentially leading to higher terms.
As well as, airlines can raise additional capital by selling shares to the general public. The proceeds could also be used to expand the business, fund research and development, or repay debt.
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Etihad’s potential listing could be a notable event, as it will be the primary time a significant legacy airline within the Gulf region transitions to non-public ownership. While discussions about going public have occurred with various airlines over time, Etihad’s reported move is the most recent.
Emirates was also under IPO consideration
In recent times, Emirates, one other UAE-based airline, was also under IPO listing considerations in an effort to boost activity on the local stock market. The news of the potential IPO listing first emerged in 2021. Nonetheless, it never got here to fruition.
In 2023, the airline’s Chairman, Sheikh Ahmed bin Saeed Al-Maktoum, told Arabian Business that going public is the federal government’s decision and that
It’s price noting that Emirates and Etihad are only a few of the airlines which have considered going public lately. In 2023, Saudi Arabia’s low-cost carrier flynas hired financial consultants for a possible IPO on the Saudi Exchange in Riyadh sometime in 2024, the budget airline told Bloomberg.
The news coincides with widespread government investments within the transportation sector, particularly aviation, across the Gulf region. These initiatives form a part of a broader strategy to scale back reliance on oil revenues.
In Saudi Arabia, the aviation industry holds strategic importance, with an effort to nurture a tourism sector set to contribute significantly to the Kingdom’s GDP, aiming for a ten% share. The country plans to inject $100 million into its aviation infrastructure, aiming to determine top-tier hubs and draw tens of millions of travelers to the country. As a part of this plan, Saudi Arabia goals to have greater than 250 destinations by 2030, optimizing airline operations and dealing toward their growth to support its larger vision.
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