Etihad seeks Airbus, Boeing bids in '08

By Ulf Laessing and James Cordahi

DUBAI (Reuters) - UAE-based Etihad Airways plans to invite aircraft makers Airbus (EAD.PA: Quote, Profile, Research, Stock Buzz) and Boeing (BA.N: Quote, Profile, Research, Stock Buzz) next year to compete for sales contracts for single- and twin-aisle aircraft, its chief executive said on Sunday.

Chief Executive James Hogan said Etihad was looking at aircraft including Airbus's planned A350 and Boeing's 787 as the Abu Dhabi airline seeks to expand its network in the Middle East and to nations including India.

He said Eithad Airways, owned by the Abu Dhabi government, might need a narrow-body aircraft for a planned regional expansion and a wide-body aircraft for more long-haul routes. He declined to say how many.

"We are also looking at the Boeing 737 and A320," he told the Reuters Middle East Investment Summit in Dubai.

Hogan said Etihad, which operates a fleet of 25 aircraft, planned to add routes to India since the country was a huge growth market, eyeing more major cities such as Calcutta and Bangalore as destinations.

On Thursday, the airline announced extra flights to the Indian cities of Mumbai, Trivandrum, New Delhi and Kochi.

"India offers huge opportunities in the next 5-10 years," he said, adding the airline might also expand its network to further destinations in North America, Asia or Africa.

"Gulf carriers are developing their geographic advantage. You can fly to any part of the world non-stop," he said.

He said Etihad was still in talks with Airbus, which is in the midst of a revamp, about a delivery date for the superjumbo A380, which is two years behind schedule.

Hogan reiterated the airline aimed at breaking even by 2010.

Middle East demand for air passenger services rose 18.1 percent last year in terms of passenger-kilometers, the fastest pace of any region in the world, according to the International Air Transport Association.

Carriers such as Emirates, Etihad and Qatar Airways are benefiting from oil revenue to buy aircraft, and use their Gulf location as a hub as well as trying to attract more tourists to their home cities.

Etihad has said it expected revenue this year to rise 60 percent to $1.25 billion as its expands its fleet, adds destinations and carries more passengers and cargo.

The three-and-a-half-year-old carrier generated $780 million of revenue last year, handling 2.83 million passengers.

The airline has said it aims to boost average seat occupancy -- the load factor -- to 65 percent from 59.1 percent last year.

To finance aircraft acquisitions, Etihad plans to borrow at least $1.2 billion this year from banks and the Abu Dhabi government.