ADQ Explores Etihad Listing in First for Gulf Hub Carrier

Abu Dhabi’s ADQ is considering a listing for Etihad Airways PJSC, potentially making it the first of the Gulf’s major hub carriers to become publicly-traded, according to people familiar with the matter.

The wealth fund has held discussions with banks about a possible deal as soon as this year, the people said, asking not to be identified because the information isn’t public. ADQ has been evaluating whether to pursue a traditional IPO as well as a direct listing, the people added.

Deliberations are ongoing and details such as the size and timing of any listing are still undecided.

Spokespeople for ADQ and the airline declined to comment.

An Etihad listing would be the first privatization of a major legacy airline in the Gulf, and is the latest example of the United Arab Emirates using its national champions to boost the domestic stock market and diversify the economy away from oil.

Etihad ownership was transferred to ADQ from Abu Dhabi’s Supreme Council for Financial and Economic Affairs in 2022, part of an effort to boost the sheikhdom’s status as a transport hub.

Saudi Arabia’s Flynas, backed by billionaire Prince Alwaleed Bin Talal, is also planning an IPO in the kingdom as soon as this year and has hired Goldman Sachs, Morgan Stanley and Saudi Fransi Capital to work on it, Bloomberg News reported in December.

International travel has rebounded since the pandemic, helping global airlines boost earnings, and pushing profit to record levels for carriers. Etihad last announced earnings publicly in 2022, reporting record profit for the first half of the year.

In neighboring Dubai, an IPO of rival Emirates was floated in 2021 as part of a plan by the business hub to sell stakes in state-owned companies to boost trading volumes.

Tumultous Times

A listing of Etihad would cap a tumultuous few years for the carrier, which has retrenched from a costly growth path hatched more than a decade ago.

Under former Chief Executive Officer James Hogan, the airline bought stakes in smaller, cash-hungry carriers across three continents, with the aim of cobbling together enough passengers to propel the Abu Dhabi-based company into the ranks of the global aviation elite. 

The carrier also undertook one of the biggest fleet expansions in the industry as it sought to narrow the gap with local rivals Emirates and Qatar Airways. But Etihad struggled to close the gap to rivals, having been founded in 2003 — 18 years after Emirates and 9 years after Qatar Airways, which operates a connecting hub in nearby Doha.

--With assistance from Leen Al-Rashdan and Siddharth Philip.