Summary
- Etihad could soon go public with an IPO, increasing visibility and access to capital.
- According to Bloomberg, ADQ is considering adding the carrier to the list and discussing possible deals with banks.
- Other airlines in the Gulf region, such as Emirates and Flynas, are also considering going public.
United Arab Emirates-based airline Etihad is reportedly considering an IPO, with plans to list later this year. According to a report from Bloomberg, deliberations surrounding the listing are still ongoing and details such as the scope and timing of any listing are still unclear.
ADQ, an Abu Dhabi government-controlled sovereign wealth fund, owns Etihad. ADQ is currently examining the possibility of taking the provider public. Discussions have already taken place with banks about a possible deal, according to Bloomberg sources familiar with the matter.
Simple Flying reached out to Etihad, but the airline declined to comment on the matter.
What happens when an airline goes public?
An initial public offering or initial public offering occurs when a private company decides to list its shares on a stock exchange and allow the public to purchase them.
Photo: Etihad Airways
Going public through an IPO can significantly increase a company's visibility. This increased exposure not only adds credibility and prestige, but also strengthens their negotiating position with lenders, potentially leading to better terms.
Additionally, airlines can raise additional capital by selling shares to the public. Proceeds can be used to grow the business, fund research and development, or pay off debt.
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The possible listing of Etihad would be a notable event as it would be the first time that a major legacy airline in the Gulf region has gone into private ownership. While IPO discussions have been held with various airlines over time, Etihad's reported move is the latest.
An IPO for Emirates was also considered
In recent years, Emirates, another UAE-based airline, has also been considering an IPO to boost activity in the local stock market. News of the possible listing first surfaced in 2021, but was never implemented.
In 2023, the airline's chairman, Sheikh Ahmed bin Saeed Al-Maktoum, told Arabian Business that the IPO was the government's decision and that “the government will always make the decision for us.”
Photo: DLeng | Shutterstock
It's worth noting that Emirates and Etihad are just a few of the airlines that have considered going public in recent years. In 2023, Saudi Arabia's budget airline Flynas hired financial advisers for a possible initial public offering on the Saudi Exchange in Riyadh sometime in 2024, the budget airline told Bloomberg.
The news coincides with widespread government investment in the transport sector, particularly aviation, across the Gulf region. These initiatives are part of a broader strategy to reduce dependence on oil revenues.
In Saudi Arabia, the aviation industry is of strategic importance. The aim is to promote a tourism sector that will contribute significantly to the Kingdom's GDP, aiming for a share of 10%. The country plans to invest $100 million in its aviation infrastructure to build world-class hubs and attract millions of travelers to the country. Under this plan, Saudi Arabia aims to have more than 250 destinations by 2030, optimizing flight operations and working towards their growth to support its broader vision.
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