CORPORATE SOCIAL RESPONSIBILITY REPORT 2011 · 2 Etihad Airways Corporate Social Responsibility...

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CORPORATE SOCIAL RESPONSIBILITY REPORT 2011

2 Etihad Airways Corporate Social Responsibility Report 2011 Etihad Airways Corporate Social Responsibility Report 2011 3

From the President and Chief Executive Officer 6 | Etihad Airways 8 | Executive Team 9 | Sustainability at Etihad Airways 10 Route map 12 | Collaborations and conversations 14 | Together 16 | Greener Together 18 | Growing Together 36 | Working Together 40 Giving Together 46 | Corporate governance 48 | Awards 50

CONTENTS

Etihad AirwaysP.O. Box 35566, Khalifa City, Abu DhabiUnited Arab EmiratesTelephone: + 9712 511 0000Fax: + 9712 511 1200Website: www.etihad.com

Scope of reportingTogether, Etihad Airways’ sustainability report, is published once a year in Eng-lish and Arabic, and covers the airline’s sustainability strategy and performance for a calendar year from 1 January to 31 December 2011, unless otherwise noted.

Activities of the airline’s outstations, subsidiaries and joint ventures have not been included in this report unless specifically mentioned.

An electronic version of the report is accessible on the airline’s website at www.etihad.com.

The report has not been independently audited but reference is made to the Global Reporting Initiative, GRI G3 Sus-tainability reporting guidelines. Where GRI indicators are addressed they are referenced as a footnote next to the GRI symbol.

For more information about this report, please contact : Anne Tullis, Head of CSR and Sustainability, Etihad Airways P O Box 35566, Abu Dhabi UAE [email protected] +9712 511 1031 or visit the website at www.etihadairways.com


HH Sheikh Khalifa bin Zayed Al NahyanPresident of the UAE and the Ruler of Abu Dhabi

HH General Sheikh Mohamed bin Zayed Al NahyanCrown Prince of Abu Dhabi and Deputy Supreme

Commander of the Armed Forces of the UAE

Board of Directors HH Sheikh Hamed bin Zayed Al Nahyan (Chairman)

HH Sheikh Khaled bin Zayed Al Nahyan (Vice Chairman)

HE Mohammed Mubarak Fadel Al Mazrouei

HE Ahmed Ali Al Sayegh

HE Mubarak Hamad Al Muhairi

HE Hamad Abdullah Al Shamsi

HE Khalifa Sultan Al Suwaidi

Etihad Airways


As a driver of tourism, we play a critical role in promoting the Emirate’s rich culture and heritage.

In 2011 Etihad contributed US$ 7 billion (9.6 per cent of Abu Dhabi’s non-oil GDP (or 3.8 per cent of total GDP), supporting around 104,000 (or 8 per cent) of non-oil jobs throughout the Emirate.

In 2011 we reinvigorated our approach to customer engagement through the newly established Guest Experience department. July 2011 saw the launch of a new initiative to encourage passengers to ‘Tell Us What You Think’. This feedback will form the basis for an ongoing program of change in productivity and performance across the customer journey to ensure we maintain the standards that have assured our position as the World’s Leading Airline for three consecutive years.

In the year since the publication of our last report we have made good progress on our journey towards sustainability. I look forward to continuing an open and productive dialogue with all our stakeholders in the coming year.

James HoganPresident and Chief Executive Officer

2011 drew to a close on a high point with the attainment of our first year of profitability – a major milestone in our eight year history, and the crowning achievement of a busy and successful year.

This result is all the more significant in light of the testing global environment in which it was achieved. The year was marked by a succession of natural disasters, the unprecedented civilian uprisings in the Middle East and North Africa, a persistent sovereign debt crisis across Europe and high oil prices. Against this backdrop Etihad Airways delivered earnings before interest and tax (EBIT) of US$137 million, on revenues up 36 per cent to US$4.1 billion. Net profit for the year came in at US$14 million.

However, we should not and do not measure our success only in commercial terms. As an organisation we aim to be completely transparent and open to a holistic evaluation - not only on our bottom line, but more importantly, on how we engage with our staff, our customers and our business partners, and on our integrity in dealing with the industry’s impacts on the environment.

Etihad Airways has a comprehensive environmental strategy which makes provision for emissions reduction, recycling and efficient resource utilisation. However, as part of an industry heavily reliant on fossil fuel,

particular focus is placed on emissions management and climate change as airlines face increasing pressure to take proactive measures to reduce their dependence on oil.

In March, despite strong reservations, Etihad Airways submitted its emissions report in compliance with the requirements of the European Union Emissions Trading Scheme (EU ETS).The decision in October by the European Court of Justice to uphold the legality of the EU ETS was disappointing. In addition to the potentially significant financial burden on our industry, the scheme is divisive and ineffective in addressing the real issue of emissions reduction. Along with local and global industry partners, we support collaboration to find sensible and fair solutions and we believe that a global sectoral approach is needed to avoid competitive distortion and negative macro-economic effects on our industry and wider global economy.

Over and above the significant investment in our modern fleet of 64 aircraft, we continue to implement initiatives that drive improved fuel efficiency and reduce our emissions and this is clearly reflected in annual efficiency improvements across our fleet. Equally importantly, we are committed to play our role in what we see as the most important carbon abatement strategy, namely the development of a commercially viable biofuel. Working with the Masdar

Institute, Boeing and Honeywell’s UOP, we will invest a total of US$2 million over five years in a biofuel research and development project investigating salt-tolerant sources of biofuel in the desert coastal regions of Abu Dhabi.

Etihad Airways employs more than 10,000 staff representing 125 nationalities. This diverse workforce is our most important asset, and their wellbeing is critical to our successful growth and sustainability. In addition to very competitive and fair compensation packages we continue to invest heavily in making this a good place to work.

In the local community and across our network, we continue to invest in people – empowering and developing individuals to take up meaningful economic roles in their communities. This commitment is no better illustrated in Abu Dhabi than by Etihad Airways’ career development and nationalisation programs. Further afield, we support a range of educational initiatives to develop both business skills and artistic talent in all disciplines.

As a natural consequence of living and working in a multinational, cosmopolitan city and by virtue of our own diverse workforce, we see it as a priority to connect people and support projects and initiatives that facilitate ongoing dialogue and engagement to promote cultural awareness and understanding.

As a natural consequence of living and working in a multinational, cosmopolitan city and by virtue of our own diverse workforce, we see it as a priority to connect people, support projects and initiatives that facilitate ongoing dialogue and engagement to promote cultural awareness and understanding.”

From the President and Chief Executive Officer

1.1, 1.2

Etihad Airways Corporate Social Responsibility Report 2011 9

Etihad Airways

8 Etihad Airways Corporate Social Responsibility Report 2011

Etihad Airways, the national airline of the United Arab Emirates, based in its capital, Abu Dhabi, was set up by government decree and made its first commercial flight in November 2003.

Wholly owned by the Government of Abu Dhabi, Etihad Airways is a global business supporting the Abu Dhabi 2030 Plan and contributing in the region of US$1.46 billion to the UAE economy.

The airline has 35 codeshare partners and serves 84 passenger and cargo destinations in Africa, Asia, Australia, Europe, the Middle East and North America operating a young and environmentally-efficient fleet of 66 aircraft.

Etihad Airways has a 29.21 per cent stake in airberlin, Europe’s sixth largest carrier and a 40 per cent shareholding in Air Seychelles, the national airline of the Republic of Seychelles.

Etihad Airways’ main business is the international air transportation of passengers. The airline also operates Etihad Holidays, Hala Abu Dhabi, Etihad Cargo and a global contact centre organisation as part of its commercial group.

Executive TeamPresident and Chief Executive Officer

Chief Operations

Officer

Chief Planning

and Strategy Officer

Chief People and

Performance Officer

Chief Commercial

Officer

Chief Financial Officer

• Cargo• Government Affairs and Aeropolitical• Network Planning• Fleet Planning• Revenue Management • Amadeus Gulf• Alliances and Distribution

• Marketing• Product• Sales • Contact Centres• Etihad Holidays• eCommerce• Service Design and Delivery• Hala Abu Dhabi• Hala Travel Management

• Airport Operations• Flight Operations

• Guest Experience

• Safety

• Aviation Security

• Finance• IT• Supply chain• Property• Treasury • Investments

• Human Resources• Facilities• Medical

• Audit• Corporate Affairs• Corporate Security

• Corporate Strategy• General Counsel and Legal• Program Management Office (PMO)

US$4.1 billion

TOTAL REVENUE 36%

US$29.6 billion

PASSENGER REVENUE

US$651 million

CARGO REVENUE 25.7%

8.3 million

PASSENGER NUMBERS 17%

38.7 billion

REVENUE PASSENGER KILOMETRES

15.8%

51 billion

AVAILABLE SEATKILOMETRES

13%

75.8 per cent

SEAT FACTOR1.8%

64 aircraft

FLEET SIZE12.3%

9,038

NUMBER OF EMPLOYEES

15.1%23.9%

2

Sustainability at Etihad Airways

Vision: To be recognised as a sustainable airline that operates to the highest standards of safety with integrity and transparency.

Mission: Sustainability will be at the core of our business. We will ensure that sustainability is integrated and integral to our day to day operations and practices and is embedded in every layer of our business thinking, planning and execution.


Objectives• Drive individual and corporate awareness of the necessity of living and working sustainably.

• Develop capability and capacity in Etihad Airways to manage the ongoing sustainability agenda.

• Meaningfully and regularly consult with and engage all our stakeholders at the hub and across the network:

- to ascertain their expectations and needs , and

- implement initiatives that show a genuine commitment to meet those expectations.

• Set and manage meaningful targets to improve continuously our sustainability performance based on globally identified, material criteria, our shareholder mandate and stakeholder expectations.

• Create tools and initiatives that allow our core stakeholders to participate: for example staff participation (training and reward), customer participation (voluntary carbon offset), and supplier participation (website recognition of adherence to policies).

• Measure and report honestly and transparently our performance in identified and material criteria.

• Promote our activity through the full range of traditional and new communications channels and in effective reporting.

• Continue to align Etihad Airways sustainability policy and activity with the objectives in the Abu Dhabi 2030 Plan.

4.8


FukuokaKumamoto

Kagoshima

Sapporo

OsakaMatsuyama

NiigataSendai

Okinawa

KuchingJohor BahruKuantan

LangkawiPenang

Phuket KrabiKoh Samui

Denpasar Bali

Kota Kinabalu

Phnom PenhHo Chi Minh City

Trat

Luang Prabang HanoiChiang Mai

Hong Kong

YangonSan'a

Praslin

DakarBanjul

Bamako

CotonouAccra

Nouakchott

OujdaNador

Madrid

LisbonFaro

Funchal

Porto Barcelona

TangiersFez

MarrakechErrachidia

OuarzazateAgadir

Minneapolis La Crosse

Columbus BaltimorePhiladelphia

ClevelandPittsburghHarrisburg

Newark

BostonHartford

NY - La Guardia

Rochester

ToledoBuffaloWestchester

Syracuse

Ottawa

Detroit

IndianapolisBloomington Champaign

Washington

Raleigh (Durham)

Des MoinesDubuque

MadisonMilwaukeeWaterloo

Sioux City

Omaha Moline

Saint LouisEvansville

Louisville

LexingtonTulsa

DenverSalt Lake City

NashvilleKnoxville

Charlotte DouglasMemphis

HuntsvilleLittle Rock

NW Arkansas

AtlantaWilmington

San Antonio

Oklahoma

Miami

OrlandoTampaFort Myers

Austin

Dallas

Houston New Orleans

Las Vegas

TucsonEl Paso

San Francisco

San DiegoPhoenixLos Angeles

Seattle

Covington

KievKievPrague

Krasnodar

St. Petersburg

Kazan

Samara

Auckland

Ouagadougou

Vancouver

Dammam

Jeddah

DamascusLarnaca

Riyadh DohaBahrain

Abu Dhabi Muscat

Beirut

KuwaitAmman

BaghdadTehran

Johannesburg

Alexandria

Khartoum

Cairo

CasablancaTripoli

MunichFrankfurt

Düsseldorf

MilanGeneva

London

Athens

Paris

Dublin

Brussels

TorontoChicago

New York

TrivandrumKochi

Kozhikode

Delhi

MumbaiHyderabad

Bengaluru Chennai

Karachi

Kathmandu

Colombo

Dhaka

Chengdu ShanghaiLahoreIslamabad

Peshawar

Astana

Almaty

Nagoya

SeoulTokyo

Beijing

Manila

Jakarta

Bangkok

Kuala Lumpur

Singapore

Brisbane

Melbourne

Sydney

Minsk

Moscow

Erbil

Basrah

Manchester

Istanbul

Malé

Seychelles

Nairobi

Lagos

São Paulo

Malaga

Nottingham

Gothenburg

StockholmHelsinkiOslo

Copenhagen

PragueKosiceStuttgart

BaselZurich

Inverness Aberdeen

EdinburghBelfastLondonderry

Rhodes

ThessalonikiBarcelona

Lyon

Madrid

Bucharest

Rome Tirana

Venice

Sofia

Birmingham London StanstedAmsterdam Berlin

HanoverHamburg

Warsaw

Budapest

Belgrade

SouthamptonExeter

Jersey

MaltaCatania

Isle of MannLeeds

MarseilleToulouse

Vienna

Innsbruck GrazSalzburg

Palma de Mallorca

MunichFrankfurt

Düsseldorf

MilanGeneva

London

Athens

Paris

Dublin

Brussels

Manchester

Istanbul

Europe Network

ChristchurchQueenstown

Dunedin

Auckland

RotoruaHamilton

Wellington

Hobart

Launceston

AdelaideCanberra

Albury

Gold Coast

Coffs HarbourPort Macquarie

Newcastle

Ballina

Ayers Rock (Uluru)

Darwin

Broome

ProserpineKarrathaPort Hedland

Newman

Perth

Cairns

TownsvilleHamilton IslandMackay

RockhamptonGladstone

Hervey BaySunshine CoastBrisbane

Melbourne

Sydney

Australasia Network

Etihad Destinations

Codeshare Partner Destinations

Etihad Future Destinations

Route map

Etihad Airways Corporate Social Responsibility Report 2011 15 14 Etihad Airways Corporate Social Responsibility Report 2011

Collaborations and conversations

Collaboration with stakeholders is essential in our sustainability endeavours.

We work tirelessly across the broadest range of stakeholders; notably employees, customers, service providers, industry groups, local businesses, government departments, non-government agencies, industry associations, charities and others to engage, educate, inform and effect change.

We engage with staff to sustain motivation, increase awareness, to educate, gain ideas, and to communicate our appreciation, specifically:

» the cabin crew social responsibility group works on supporting charities;

» the green champions are volunteers within the company who get together regularly to share ideas and initiatives and then communicate these amongst their colleagues;

» the three-day ‘Marhaba’ induction program for new staff includes a section on environmental awareness;

» the carbon management committee members are representative of all key departments within the business. Regular meetings ensure a common understanding of carbon and emissions related issues; identify and approve policy positions, projects and programs relating to carbon management;

» the biofuel committee is led by the Chief Operations Officer and implements the biofuel strategy for the business; and

» mass communication facilitated through a dedicated intranet site for environmental matters, a dedicated email and a section in the internal staff newspaper – Etihad News.

Etihad Airways customers form a key stakeholder group. In July 2011, a new initiative was launched to facilitate convenient and accessible communication between Etihad Airways and its customers. A range of processes put in place encourage customers to; ‘tell us what [they] think’; measure customer feedback clearly and efficiently; and make this information accessible to track productivity and performance. The new systems allow the airline to centralise and streamline all customer feedback and customer relations activity

Within the local community, the airline uses media channels to communicate and also engages directly with local governments and businesses through partnership groups, including the following;

» membership of the Abu Dhabi Sustainability Group (ADSG);

» membership of ADSG task forces including the waste, the labour practices and sustainable procurement task groups; and

» within the industry Etihad Airways has an extensive network of collaboration, both locally regionally and at a global level. These are essential in effectively addressing the complex global challenges and developing common positions.

Our participation includes the following:

» the Abu Dhabi Stakeholders Coordination Group, focused on aviation and climate change and hosted by the Department of Transport;

» regular meetings with the environment team of the UAE General Civil Aviation Authority as part of an aviation environment policy group;

» membership of the regional Arab Air Carriers Associations’ Environmental Policy Group; and

» global interaction with international airlines through the International Air Transport Association Environment Committee and International Affairs Committee.

Increasingly the issues facing aviation are far too complex to address effectively within the industry and thus its collaborative efforts are becoming much more extensive. The airline industry’s commitment to driving the commercialisation of biofuels has resulted in the creation of an airline stakeholder group, the Sustainable Aviation Fuel Users Group, and in cross-industry engagement with many other stakeholders throughout the supply chain.

Etihad Airways’ flight operations and technical teams engage extensively with all in the aviation industry to investigate opportunities for improvements in flight paths and routes. The airline’s engagement on the INSPIRE - Indian Ocean Strategic Partnership to Reduce Emissions – project involved over 20 global stakeholders including airlines, airports, civil aviation authorities and airspace navigation providers. The potential emissions savings are simply not possible without this extensive collaboration.

In future Etihad Airways will continue to work collaboratively, ensuring that these efforts remain relevant to support aviation sustainability.

In July 2011, a new ‘tell us what you think’ initiative was launched to facilitate convenient and accessible communication between Etihad Airways and its customers.

4.13, 4. 16, PR5

Together

Etihad Airways acknowledges its position as an integral part of society and its potential to have both positive and negative impacts on the communities in which it operates.

Aligned with the greater ambitions and vision of the Emirate of Abu Dhabi, the sustainability policy and supporting strategy is designed to ensure its compliance with all applicable international and local regulations and standards; mitigate any potential risks and enhance the airline’s reputation through the implementation of industry best practice in the fields of sustainability and social responsibility.

Sustainability is a collaborative process, and one which will only succeed in partnership with the broad range of internal and external stakeholders. For this reason, the airline’s sustainability program is called Together.

Together is a four-part policy, communications and reporting framework for engagement with all our stakeholders - our staff, the local community and economy, the environment, and the greater communities across our global network.

• Greener Together• Growing Together• Working Together• Giving Together

In these four areas, the aim is to work collaboratively in: • Identifying and developing awareness of the issues and challenges; • Focusing action to address these challenges; and • Making a difference, through measurable improvement, year on year.



Etihad Airways’ environmental strategy and program is driven primarily by its commitment to reduce its carbon dioxide emissions.

Nevertheless, the overall strategy is diverse, looking at the environmental performance of aircraft operations and the supporting ground activities.

The introduction of more aircraft in 2011 saw an overall increase in resource use and emissions. However, there were substantial improvements in fuel efficiency when measured per passenger kilometre – a clear reflection of the success of Etihad Airways’ fuel saving initiatives.

Particular focus was placed on staff awareness and partnership development and these are covered in some detail.

Environmental policy Etihad Airways is an important driver of economic growth and diversification in Abu Dhabi.

While operating under a strict commercial mandate from our shareholder, we recognise our responsibility to the community and are committed to mitigate the impact of our operations on the environment. To achieve this Etihad Airways pledges to: » Abide by all national and international

environmental legislation that applies to our business;

» Put in place the measurement systems and working procedures to allow us to track and modify our environmental performance; » Innovate to reduce our dependency on traditional

forms of energy and aviation fuel; » Train our staff on the importance of environmental

protection in our business operations and on their individual responsibilities; and » Communicate and report openly and transparently

on our environmental performance to all our stakeholders including employees, customers, suppliers and partners. We hold it as a fundamental principle that true success requires the engagement and participation of many different partners, within the markets in which we operate and across the air travel industry as a whole, and therefore aim to: » Encourage collaborative action and play an active

role in industry debate on environmental issues; and » Work with industry bodies such as the International

Civil Aviation Organization (ICAO), the International Air Transport Association (IATA), the Arab Air Carriers Organisation (AACO) and with local government and non-government partners on identifying issues and developing common solutions.

The environment is a joint responsibility and every member of our workforce has a duty of care to uphold this policy, limit their individual impact on

the environment and actively work to mitigate the potential impacts of our business on the environment.

Data collection and materialityWe continue to monitor and measure the environmental performance associated with our key operations and activities. Our efforts are focused on those activities that are most material, notably: » those activities or operations that are covered by

environment related regulations; » those that make the largest contribution to our

carbon footprint, both locally and globally; and » those that may be of specific concern to certain

stakeholder groups.

We make use of several important reference documents to ensure that we are appropriately identifying key issues, including the Greenhouse Gas Protocol, and, for reporting purposes, the Global Reporting Initiative.

Non complianceEtihad Airways complies with all relevant environment related legislation and regulations.

We make use of several important reference documents to ensure that we are appropriately identifying key issues, including the Greenhouse Gas Protocol, and, for reporting purposes, the Global Reporting Initiative Guidelines.


Our challenges

Decarbonising the aviation industryWhilst our environmental strategy is diverse, covering all potential environmental concerns both in the air and on the ground, the efforts to reduce our reliance on fossil fuel are at the forefront.

The industry four-pillar strategy remains valid and essential in engaging the broad range of industry stakeholders and looking at all potential opportunities to decouple aviation growth and carbon emissions is a priority.

Whilst aircraft development and operational controls to improve efficiency continue, there is increasing emphasis on alternative sustainable fuels as a way to decarbonise the industry. Several technologies have been approved to create aviation fuel from non-fossil fuel based feedstock and a number of airlines are using these alternative fuels on a limited commercial basis.

Waste and materials management With the carriage of 8.3 million passengers in 2011, the production of significant quantities of waste is inevitable. In this area, most of the focus is on minimising resource utilisation and the reduction of final waste material. This includes the careful measurement of food requirements and preferences; cutting down on single-use items and using products that can be collected and cleaned for re-use.

On the ground, we work closely with our catering providers and equipment and product suppliers in reducing consumption and looking at ways to minimise unnecessary items which will end up as waste.

Recycling continues across our main commercial facilities and key residential complexes. We will look to expand on this, both by extending the practice and encouraging and educating our staff.

Effective engagement and messagingIn 2011 we extended the scope and range of our stakeholder engagement to communicate our messages more effectively. An environmental awareness session for all our new ground staff is part of their three-day induction program. Etihad Airways also participates in global environmental events such as World Environment Day and Paperless Day, while continuing to engage extensively within the industry in a range of activities and initiatives.

Aircraft emissions management The current contribution to man-made carbon dioxide emissions by air transport is two per cent, and the Intergovernmental Panel on Climate Change (IPCC) estimates that this could rise to three per cent by 2050.

The emissions management strategy of the industry is based around rigorous initiatives to reduce fuel burn under the industry inspired ‘Four Pillar’ strategy; technology innovation, operational efficiency, improvements in infrastructure and market based mechanisms.

Driven largely by fuel costs, substantive improvements are being made in the way our aircraft are designed and built, the way in which they are flown; and by updating and modifying ground infrastructure including airport procedures, airspace modifications and the removal of unnecessary ground infrastructure restrictions.

Globally these have achieved incremental efficiency improvements across the industry.

Aviation has a distinct advantage over road transportation in having far fewer distribution points. For example in Abu Dhabi there are about 200 petrol stations, whereas Abu Dhabi airport provides for almost all the fuel needs of the airlines out of the Emirate of Abu Dhabi. This means that if the challenges of supply, refining capability and cost parity can be addressed, the use of biofuels has the potential to make a significant contribution to decarbonising the aviation industry. We believe that, given the limitations on other forms of technical innovation in the short- and medium-term, sustainable alternative fuels should be a priority for the aviation industry.

The industry four-pillar strategy remains valid and essential in engaging the broad range of industry stakeholders and looking at all potential opportunities to decouple aviation growth and carbon emissions is a priority.

AVIATION IN PERSPECTIVE

2% of Global CO2 emissions

12% of Transport CO2 emissions


The carbon footprint is the total amount of carbon dioxide emissions or equivalent associated with our activities. As our operations and activities are geographically widespread, and to ensure we focus on those that we can influence and reduce, we measure and set improvements on those that are considered material. At present the focus is on our core aircraft operations, the operations of our 43 ground vehicles and the operations at our key office facilities.

Our carbon footprinting has developed in alignment with the Greenhouse Gas Protocol. The Protocol covers three types of emissions, defined under Scope 1, Scope 2 and Scope 3Scope 1 - Direct emissions from burning fossil fuel, such as jet fuel, gasoline and diesel.Scope 2 - Indirect emissions such as those associated with energy requirements in the production of electricity, potable water through the desalination process and chilled water for air conditioning.Scope 3 – Emissions from other sources, including waste disposal.

The focus in 2011 was on Scope 1 emissions and Scope 2 emissions generated at the largest ground facilities within the UAE. In future years we will look to expand these and include other areas of our business that are considered material and that we are able to influence in terms of improvement.

Total Usage

UnitConversion Factor

Tonnes of Carbon Dioxide

% of Total

Scope 1

Aircraft 1,722,842 tonnes 3.15tCO2/tfuel 5,426,954 99.74

Ground Vehicle (Petrol) 190,340 Litre 2.3kgCO2/litre 438 0.01

Ground Vehicle (Diesel) 1,932,795 Litre 2.7kgCO2/litre 5,219 0.1

Scope 2

EY Complex Electricity 1,501,981 kWh0.700 kgCO2/

kWh1,051 0.02

EY Plaza Electricity 675,813 kWh0.700 kgCO2/

kWh473 0.01

EY Complex District

Cooling Water4,239,162 tonnes/hr

0.674 kgCO2/

tonnes/hr2,857 0.05

EY Plaza District Cool-

ing Water

(including residential

areas)

3,009,064 tonnes/hr0.674 kgCO2/

tonnes/hr2,028 0.04

EY Complex potable

water 74,202 m3 15kg CO2/m3 1,113 0.02

EY Plaza Offices po-

table water2,481 m3 15kg CO2/m3 37 0

Scope 3

Waste to Landfill 728,700 kg1.000 tonnes/

CO2729 0.01

Total CO2 emissions 5,440,899 100

Our carbon footprint

The global industry commitment The aviation industry has improved its fuel efficiency by 70 per cent over the last 40 years.

Pressure placed on the industry due to climate change concerns, fuel prices, carbon regulations and the perception of the industry’s ‘do nothing’ attitude, has reinforced the need to be much more proactive, about global strategy and action.

The industry has come together in a way unique to aviation in forging a set of collective industry goals, namely:

» an average annual fuel efficiency improvement of 1.5 per cent annually to 2020;

» the stabilisation of net CO2 emissions levels (‘carbon neutral growth’) from 2020; and

» a 50 per cent reduction in net carbon dioxide emissions compared to 2005. Etihad Airways is fully supportive of this industry-wide commitment.

EN1, EN3, EN4, EN8, EN16

The aviation industry has come together, unlike any other industry, to agree on quantitative emissions reduction goals.


Our actions

EN5, EN6, EN18

The environmental strategy is the responsibility of the Head of Environmental Affairs at Etihad Airways. Through communication and consultation across all business units the strategy is developed into a comprehensive environmental plan and from these tangible meaningful actions are taken.

Initiatives to improve fuel efficiency are extensive and the environment office ensures that these are measured not only in terms of fuel and financial benefits, but also the resulting reduction in associated carbon emissions.

InvestmentGreener enginesIn 2011 Etihad Airways began an engine upgrade program for more than half the Airbus A330 fleet. Scheduled to last two years, the program will see 15 of the airline’s A330 aircraft with Trent 700 engines being retrofitted with enhanced performance kits, resulting in significant improvement to the overall efficiency of the aircraft. It is estimated that the modification process will save more than 3,000 tonnes of fuel and reduce our carbon footprint by more than 10,000 tonnes per year.

Lighter cargo containersEtihad Airways, along with its cargo container partner, Jettainer, embarked on a program in 2011 to replace 3,000 of the original aluminium containers with environmentally-friendly lightweight versions. The new lightweight containers are manufactured from a range of composite materials including Kevlar, the material used in making bullet-proof jackets. This composite is tougher and much lighter with an average weight saving of 17kg per container or over 200kgs per average wide-bodied flight. This significant

weight reduction will lower fuel consumption, costs and CO2 emissions. It is estimated that the implementation of the new containers will cut emissions by approximately 5,000 tonnes in 2012.

Collaboration and innovationGreen flights At a time when fuel costs remain high and there is pressure on the industry to take action to reduce emissions, Etihad Airways has embarked on a number of multi-stakeholder initiatives to enhance flight operations. In July 2011, we worked with the various stakeholders engaged in the ‘INSPIRE’ program. This ‘Indian Ocean Strategic Partnership to Reduce Emissions‘ investigates aspects of flight and identifies opportunities for fuel saving and emissions reductions. All the stated aims of INSPIRE partners, which include airports, air navigation service providers and civil aviation authorities, include accelerating the development and implementation of operational procedures to reduce the aviation industry’s carbon footprint, capitalising on existing technologies and best practice, and developing shared performance metrics.

The Etihad Airways flight from Abu Dhabi to Sydney in July 2011 resulted in savings of more than 15 tonnes of carbon dioxide emissions. This is a clear demonstration of the massive savings in emissions that can be achieved if airlines are able to make more effective use of the on-board computerised systems for calculating the most efficient routes based on current weather conditions; and the removal of airspace restrictions, many of which simply require political will.

If similar savings were possible just once each week for flights between Abu Dhabi and Australia, we

conservatively estimate a saving of 350 tonnes of fuel annually based on our current frequency. This would represent a reduction of more than 1,100 tonnes of carbon dioxide.

Etihad Airways strongly advocates industry modernisation that will allow aircraft to fly within their current capabilities. IATA estimates that global emissions reductions of up to 12 per cent can be achieved simply by improving and modernising ground and airspace infrastructure and by allowing more reliance on the aircraft systems to calculate efficient flight paths.

Carbon offsettingThe Etihad Airways loyalty program had 1.3 million members by the end of 2011, an increase of over a third on the previous year. A carbon offsetting program provides the opportunity for members to donate their miles to carbon reduction projects around the world. In 2011 the approximate equivalent of AED 26,000 was donated as miles, offsetting approximately 600 tonnes of carbon dioxide. Three projects benefited from this offset. One in India involves the switching of the fuel use for a paper factory from furnace oil to ‘bagasse’ – a renewable energy source using the pulp left after crushing sugarcane to extract the juice. Projects in Uganda and Cambodia involve upgrading of traditional low-efficiency stoves with more efficient types.

Regulatory regimesThe most significant move towards regulating carbon emissions from aviation has been through the European Union Emissions Trading Scheme (EU ETS).

From 2012, airlines flying within, into and out of the EU will have to account for their emissions and pay for the right to emit carbon.

In 2011 Etihad Airways received notification of its entitlement of free carbon allowances. The remainder will need to be purchased on the carbon market or through auction. The financial exposure on this is likely to be significant, and heavily influenced by fluctuating carbon prices and the growth of our traffic into Europe.

Etihad Airways’ position on emissions tradingOur position on emissions trading can be summarised under the following points: » While recognising emissions trading as one of a

range of potential market-based measures in a many tiered approach to reducing carbon emissions, we view the EU ETS and any other national or regional emissions trading scheme, as counterproductive and contrary to the terms of the Chicago Convention.

» The current EU ETS scheme penalises all airlines, does not take account of investment by individual airlines, and will undoubtedly reduce funds available for further investment in new and emerging technologies. In short, it will have the effect of penalising growth without taking account of direct investment in efficiency. The mechanism used by the scheme in determining the industry cap and distributing the free allowances effectively favours established airlines over those with more ambitious growth plans.

» No rules for the application of the scheme’s financial proceeds by member countries have been determined and there is no indication that they will be invested in environmental programs.

» We fully support the overriding position of the UAE to pursue a global ICAO-led scheme to address climate change. We will therefore continue to encourage ICAO to pursue with diligence its work on the Assembly Resolution on Climate Change and hope that its conclusions will make the EU ETS redundant.

» We support the prioritisation by the UAE government of measures that will result in a tangible and quantifiable reduction of emissions, such as those possible through infrastructure improvements in ground and air traffic management and a reduction in regional airspace inefficiencies. This will undoubtedly require multi-stakeholder input from airlines, airports, the military and neighbouring states. Effectively managed actions could reduce fuel wastage and emissions considerably.

» We strongly oppose measures that will impose any additional financial burdens on airlines without a corresponding and real reduction in carbon emissions. We also believe that market- based measures should be used with caution, and only as a last resort, when all possible operational measures have been exhausted.

» Any measures directed at airlines should take account of efficiency, and the considerable capital investment involved in the acquisition of a modern, fuel-efficient fleet. Those airlines with younger more efficient fleets should be treated advantageously over those with older aircraft/engines.

» Investments by airlines in environmental projects, such as biofuel research, should be credited against any market-based measures.

Etihad Airways Corporate Social Responsibility Report 2011 25


Fuel efficiency and emissions reduction

Fuel use and corresponding carbon dioxide emissions increased in 2011 in line with fleet expansion. Nevertheless we have been successful in demonstrating year on year efficiency improvements.

As a result of continued efforts we improved the efficiency of our passenger fleet by four per cent on our 2010 performance. This adds up to an improvement of 17 per cent between 2006 and 2011 which is more than double the industry target of 1.5 per cent per annum.

Nitrous oxide (NOx) emissions

A local pollutant, released during the fuel combustion process, NOx emissions are regulated by ICAO, through emissions standards for new engine types.

We are able to track emissions during the landing and take-off (LTO) cycle at Abu Dhabi airport using the ICAO engine emissions database.

The total NOx emissions increase as our fleet expands and the number of flight events increases. Nevertheless, since 2007 we have seen a 29 per cent improvement in emissions per LTO. This can be attributed to stricter NOx emissions controls in the newer generation of aircraft engines.

Although the overall trend is positive, there was a slight increase in NOx per LTO between 2010 and 2011, which is a reflection of the increase in the proportion of the wide-bodied long haul aircraft being utilised in 2011.

Fuel dumping

Passenger medical emergencies and technical issues may require a flight to divert to an alternative airport. If this occurs while the aircraft weight is still above its maximum landing weight, mid air fuel dumping may be required prior to landing. This procedure is only performed if absolutely necessary and in 2011 this occurred only seven times, mainly as a result of passenger illness requiring emergency medical treatment.

Noise

Aircraft noise continues to affect local communities around busy airports. Global regulations on aircraft noise control are determined through ICAO which sets noise restrictions on new engines as part of the certification process. In addition, local regulations may be placed on individual airports in terms of restrictions on noisier aircraft and curfews. All Etihad Airways aircraft are compliant with the most stringent Chapter 4 noise standards imposed by ICAO. Etihad Airways was not subject to any noise complaints or infringements during 2011

EN3. EN20. EN28

Measuring our efficiency

Etihad Airways has improved fuel efficiency on its passenger fleet by 17 per cent per passenger kilometre between 2006 and 2011, more than double the 1.5 per cent per annum industry target.

TOTAL FUEL CONSUMPTION g FUEL/100PK

2006 2007 2008 2009 2010 2011

PASSENGER AIRCRAFT (THOUSAND TONNES)

1800

1600

1400

1200

1000

800

600

400

200

0

50

45

40

35

30

25

20

15

10

CO2 EMISSIONS g CO2 / 100TK

2006 2007 2008 2009 2010 2011

6000

5000

4000

3000

2000

1000

0

160

150

140

130

120

110

100

TOTAL FUEL CONSUMPTION g FUEL/100PK

2008 2009 2010 2011

2000

1800

1600

1400

1200

1000

800

600

400

200

0

256

254

252

250

248

246

244

242

240

238

CO2 EMISSIONS g CO2 / 100TK

2008 2009 2010 2011

6000

5000

4000

3000

2000

1000

0

800

790

780

770

760

750

740

730

720

710

700

ALL AIRCRAFT (THOUSAND TONNES)

TOTAL NOx (TONNES) kg NOx / LTO

2007 2008 2009 2010 2011

1200

1000

800

600

400

200

0

50

45

40

35

30

25

20

15

10


While the airline industry works tirelessly in looking for opportunities to reduce its carbon footprint, the growth of the industry, in line with global economic and social demands, will inevitably drive the continued net growth in emissions.

We recognise this and the role we can play in helping to support the move towards viable sustainable alternatives to regular fossil fuel as a major step forward in decarbonising the industry.

The progression towards the acceptance and potential use of biofuels in the aviation industry over the last two to three years has been rapid with drivers such as climate policies, carbon regulations and fears around the cost and supply of fossil fuels leading to a proliferation of global initiatives investigating sustainable aviation alternatives and their commercial feasibility.

It is evident that the only real opportunity for a step change in technology will come through an alternative fuel. However its development is not without challenges and constraints.

» It will have to be a ‘drop in’ fuel with the same specification as regular fuel with the required certification. » It will have to be cost competitive with regular fuel

and its total lifecycle impacts will have to be lower than those of traditional fuel sources. » Biomass and refining capacity will have to meet

the high global demand for aviation fuel which is presently approximately 60 billion gallons per year. » In the production of biofuel, sustainability and

ethical issues around competition with local food and water resources and the social impacts of biofuels must be taken into account.

Our commitment to using only fully sustainable fuels is confirmed by our membership of the Sustainable Aviation Fuel Users Group (SAFUG). SAFUG consists of 23 international airlines, all committed to enabling the commercialisation of sustainable alternatives to aviation fuel. This independent airline group represents approximately 20 per cent of the commercial global fuel use and is focused on supporting and driving sustainability principles in the development and commercialisation of alternative fuels. New members are only admitted by majority vote of existing members and are required to make a formal application committed to driving the development of biofuels and sign to the SAFUG sustainability pledge.

The pledge includes commitment to the following: » The development of feedstock in a manner which

is non-competitive with food and where biodiversity impacts are minimised. In addition, the cultivation of plant-based feedstock sources should not jeopardise drinking water supplies. » Total lifecycle greenhouse gas emissions from plant

growth, harvesting, processing and end-use should be significantly reduced compared to those associated with jet fuels from fossil sources. » In developing economies, development projects

should include provisions or outcomes that improve socio-economic conditions for small-scale farmers who rely on agriculture to feed their families, and that do not require the involuntary displacement of local populations. » High conservation value areas and native eco-

systems should not be cleared and converted for jet fuel plant source development.

EN6

The Sustainable Bioenergy Research Consortium Led by the Masdar Institute and funded by Etihad Airways, Boeing, Honeywell’s UOP and the Abu Dhabi Government, the project is focused on the research and development of biofuels in the region.

The flagship program of the consortium is investigating and piloting an integrated seawater energy agriculture energy system (ISEAS) utilising both aquaculture and potential feedstock.

The production of Salicornia – a saltwater tolerant, oil producing halophyte – is part of a system which includes the development of commercial fish and shrimp farming along marginal desert coastal areas.

The ISEAS makes provision for the nutrient-rich effluent from the aquaculture system to be directed to Salicornia plantations, providing essential nutrients for the growth of these shrub-like plants. The effluent undergoes further biological treatment in mangrove habitats which can themselves be harvested and converted into electricity, as well as providing a habitat for birds and coastal fish.

Initial small scale investigations into yield and extensive desk top investigations have been very positive, with studies indicating that there may be some carbon positive benefits as residual carbon becomes locked in the soils.

In 2012, the selection of a sizeable site will allow for the pilot project to commence.

Waste water from the aquaculture operation, which is enriched in nutrients, is used to irrigate salt-tolerant biomass (halophytes)

Water that drains from the halophyte fields is fed into a mangrove wetland

3

5

Pump seawater from the ocean to ponds, where fish and/or shrimp will be farmed

1

Biomass from the halophytes is used to produce bioenergy, including biofuels

4Biomass from the mangroves can be converted into bioenergy

6

Aquaculture for fish and shrimps

2

Driving the development of alternative, sustainable fuels

We see the use of sustainable biofuels as a major positive step change for our industry and we are proud to be involved with the Masdar Institute, Boeing and Honeywell’s UOP on a project that makes use of the resources of this region and supports the sustainability strategies of Abu Dhabi, including key research and development.”

Etihad Airways Sustainability Report 2011 29


Ground emissions

Emissions from ground vehiclesEtihad Airways owns a fleet of 48 buses, ranging from 14-seater minibuses to 40-seater coaches. Their fuel consumption is carefully monitored allowing for the calculation of associated emissions.

In 2011, the utilisation of diesel vehicles increased slightly compared to 2010 while there was a decrease in the use of petrol driven buses. Overall this resulted in a 14 per cent reduction in carbon dioxide emissions.

Emissions from our facilitiesOur key office facilities, namely the Etihad Airways headquarters, the Training Academy and Etihad Plaza provide a work environment for approximately 44 per cent of our Abu Dhabi ground-based staff. The headquarters, which includes the Training Academy, is located close to Abu Dhabi International Airport, adjacent to land that is considered to be of no significant biodiversity value. Airline property is not close to any ‘desert preservation’ areas designated in the Abu Dhabi 2030 Plan.

The emissions associated with these facilities can be calculated based on the data we collect for electricity and water usage and the provision of centralised cooling water.

As expected, the use of electricity and water increased in these facilities in 2011 in line with the number of staff using the facilities and as their use for meetings and training purposes increased. Despite its being the most resource intensive utility, the level of district cooling required for our Etihad complex and Etihad Plaza showed improvements between 2010 and 2011. At the Complex and Plaza the total cooling demands fell by three and eight per cent respectively, saving the equivalent of 260 tonnes of carbon dioxide.

These achievments were primarily as result of improvements in the building management systems, setting the thermostats to automatic, to work more effectively as and when required.

EN2, EN3, EN4, EN5, EN7

Resource management

EN1, EN8, EN9

Resource savingsThe use of copy paper in the offices is monitored and staff are encouraged to send documents electronically and avoid printing unnecessarily.

Various communication tools are used to drive these messages to staff:• As part of the ‘Marhaba’ induction training for all new ground staff• The Green Champions, who have representation in most departments, are tasked with encouraging best practice among their colleagues. Reducing potable waterPotable, that is, fully treated, water in Abu Dhabi, is primarily derived from desalinated seawater.

At our main facilities it is used for bathrooms, canteens, cleaning purposes and for irrigation. In 2011 the water demand at both our main facilities, the Etihad Complex and the Etihad Plaza, fell by nine and nearly 16 per cent respectively.

These improvements are a reflection of our efforts to be more careful in the use of water, and a result of fewer maintenance activities which place additional demands on water. 2011 also saw fewer instances of problems with the water systems such as leakages and pipe work problems.

In 2012, the launch of the company-wide water savings campaign should drive further water saving and an additional five per cent reduction target has been set.

Waste collection and recycling Paper, cardboard, cans and plastic bottles are collected and placed in bins around offices and other areas.

This initiative has been extended to our residential facilities in Etihad Plaza, with the provision of collection bins close to every residential tower, and clear communication to all residents about the locations of these and the types of materials that can be segregated.

We also support the Philippine Community Fund (PCF), a non-sectarian not for profit organisation that works in the most depressed areas of the Philippines with communities who are unable to provide their own basic needs. We encourage staff and individual to support and collect ring pull tabs from canned drinks and food tins.

Etihad Airways also supported a student from a nearby school in an independent initiative to recycle inkjet printer cartridges in support of the British Guide Dog Association.

Waste material from offices, the canteen and from facilities and maintenance management continues to be monitored.

The airline made significant improvements in the amount of paper and cardboard that was segregated for recycling in 2011. This is reflected in a slight decrease of 3,150 kilograms in waste being taken to landfill from our head quarters and office facilities.

ETIHAD COMPLEXELECTRICITY CONSUMPTION(Total KwH)

1,501,9812011

1,408,8672010

ETIHAD CREW BUS FUEL CONSUMPTION

Total CO2 emission

Petrol(litres)

total usage

Diesel(litres)

total usage

5,656,329

6,645,901

190,340

350,237

1,932,795

1,774,469

2011 2010

ETIHAD PLAZA (OFFICES)ELECTRICITY CONSUMPTION(Total KwH)

675,8132011

660,3592010

ETIHAD COMPLEXDISTRICT COOLING(Total Cooling Tonne/hr)

4,239,1622011

4,358,3152010

ETIHAD PLAZADISTRICT COOLING(Total Cooling Tonne/hr)

3,009,0642011

3,274,5992010

ETIHAD COMPLEXWATER CONSUMPTION (Total cubic metres)

74,2022011

81,5602010

ETIHAD PLAZAWATER CONSUMPTION (Total cubic metres)

24812011

29462010

ETIHAD COMPLEXWASTE GENERATION(Total kg)

728,7002011

731,8502010

ETIHAD PLAZAWASTE GENERATION(Total kg)

24,775

17,3002010

ETIHAD COMPLEXOFFICE PAPER CONSUMPTION (Reams)

18,7252011

21,4502010

ETIHAD PLAZAOFFICE PAPER CONSUMPTION (Reams)

3,4282011

3,2962010


Green Champions Etihad Green Champions are staff volunteers who help to support the office greening and drive behaviour change by educating staff in best practice. Recycling, using office resources wisely, switching off office equipment and lighting when not needed, are examples of actions encouraged among our staff.

Earth HourEarth Hour in the UAE was marked on March 26, 2011 between 8.30pm and 9.30 pm. This international event, started in Australia in 2007, has gained increasing global recognition and support as a way of driving awareness when it comes to energy saving.

We supported Earth Hour by promoting the event, encouraging staff support and by turning off the lights across our major facilities in Abu Dhabi.

Building on this initiative, we participated in a joint activity ‘Going Beyond Green’ with the Abu Dhabi Airports Company (ADAC). This included an inspirational presentation from HH Sheik Abdul Aziz bin Ali Al Nuaimi of the ruling family of Ajman, popularly known as the “Green Sheikh” for his eco-friendly initiatives.

Kid’s art competitionWe partnered with ADAC in a children’s art competition. We invited children between the ages of two and 12 to submit entries using recycled materials The theme of the competition was Saving Planet Earth. The overall winners won a fantastic Etihad flight simulator experience.

Staff engagement

Green Room2011 saw the official opening of the Etihad ‘Green Room’. Located in the Etihad Training Academy, the room is a showcase for environmental best practice and eco-technology and a venue to raise environmental awareness.

World Environment Day Etihad Airways celebrated World Environment Day in June as part of the airline’s environmental awareness program.World Environment Day is the most widely supported annual event aimed at promoting positive environmental action.

The environment team arranged a number of activities including earth meditation sessions, the sale of eco-friendly products, documentary screenings and presentations.

Our efforts rewarded In November 2011, Etihad Airways was honoured for its commitment to the environment at China’s 2011 Top Travel magazine awards.

The prestigious Environmental Contribution of the Year Award is given annually to travel companies for demonstrating global leadership in corporate social responsibility.

The award was made in recognition of the introduction of ‘Permagard’, a polymer coating applied to the exterior of our entire fleet of aircraft. The Permagard treatment provides protection to the aircraft surface, reflecting dirt and dust from the surface, so aircraft need to be washed less often. The treatment also eliminates the need for strong cleaning agents, which can be replaced by more environmentally friendly alternatives.

This has resulted in significant savings in washing water and cleaning fluids - 10 million litres of water a year, as well as a 96 per cent reduction in cleaning fluid, from 50,000 litres to just 2,000 - as well as improvements in fuel efficiency from reduced drag on aircraft.


Goals and targets

Reduction targets Outcome

Five per cent reduction in potable water consumption at Etihad Complex

TARGET EXCEEDEDNine per cent reduction in consumption in 2011 versus 2010

Five per cent reduction in energy consumption TARGET NOT MET

Etihad Complex Seven per cent increase in consumption in 2011 on 2010

Etihad Plaza officesTwo per cent increase in consumption in 2011 on 2010

10 per cent reduction in the volume of waste to landfill from Etihad Complex

TARGET NOT MET0.4 per cent reduction in volume of waste to landfill in 2011 on 2010

10 per cent improvement in waste segregation and recycling in Etihad Complex

TARGET EXCEEDED45 per cent more material segregated and sent for recycling in 2011 on 2010

10 per cent reduction in copy paper use in TARGET NOT MET

Etihad Headquarter (HQ)four per cent reduction in copy paper use in 2011 on 2010

Etihad Training Academy (TA)Three per cent increase in copy paper use in 2011 on 2010

Etihad Plaza officesFour per cent increase in copy paper use in 2011 on 2010

District cooling No target set for 2011

Etihad Complex Three per cent reduction in district cool-ing needs in 2011 on 2010

Etihad Plaza officesEight per cent reduction in district cool-ing needs in 2011 on 2010

Reduction targets Action plan

Five per cent reduction in potable water consumption at Etihad Complex compared to 2011

The 2012 water saving campaign will promote water saving among staff.

Feasibility studies on using drainage water from air handling and fan cool condensate for irrigation may lead to implementation of this initiative in 2012.

Five per cent reduction in energy consumption at Etihad Complex and the Etihad Plaza offices compared to 2011

A switch to energy saving lighting

Improvements in the building manage-ment systems will enable a more effec-tive and efficient scheduling system for lighting and air conditioning systems.

Five per cent reduction in cooling water requirements at Etihad Complex compared to 2011

More comprehensive cleaning and maintenance of air conditioning systems.

Improvements to building management system.

10 per cent reduction in the volume of waste to landfill from Etihad Complex compared to 2011

A waste composition assessment will allow a comprehensive plan which reflects reduction opportunities.

10 per cent improvement in waste segregation and recycling in Etihad Complex compared to 2011

Additional materials for recycling will be identified.

Continued education and awareness raising for office and cleaning staff

10 per cent reduction in copy paper use in both Etihad Complex and Etihad Plaza offices compared to 2011

Changing of the printer setting to default double sided.

Education and awareness raising and communication to office staff by the Green Champions.

Our 2011 targetsSeveral targets were set in 2010 for 2011.

Some of these targets were met and our efforts were particularly rewarded with a nine per cent reduction in water consumption and a 45 per cent increase in the amount of wastepaper and cardboard collected for recycling.

However, some of our targets were not met. We set a five per cent reduction target for our energy consumption in Etihad Complex and in our offices at Etihad Plaza. However, the electricity demand in these facilities increased during 2011 by seven and two per cent respectively. This was primarily due to the more intensive use of the facilities, particularly our crew training areas. Plans for building improvement projects in 2012 should allow for efficiency improvements in 2012.

Our 2012 targetsThe main focus for 2012 is to drive down electricity consumption in our ground facilities, identify ways and means to reduce the volume of waste going to landfill and to use the 2012 water saving campaign to reduce dependence on fresh water both in our offices and facilities and in the daily lives of our staff.

Unlike last year, we will also set a target for our cooling water consumption. While we achieved improvement in this area from 2010 to 2011 (three per cent and eight per cent respectively at Etihad Complex and Etihad Plaza), the facilities management team will be looking at the feasibility of further improving the efficiency of the air cooling units. Signifigant upgrading of the water distribution systems within Etihad Airways facilities should result in fewer instances of broken pipeworks and leaks.

Summary

Units 2011 2010

Aircraft Operation Metrics

Total Passenger Kilometers (PK) 40,020,920,494 34,516,523,826

Freight Tonne Kilomters (FTK) 2,245,587,824 2,212,751,786

Total Tonne Kilometer (TK) 7,048,098,283 6,354,734,645

Fuel Consumption

Total Consumption tonnes 1,722,842 1,548,638

Fuel consumption (passenger flights only) tonnes 1,561,426 1,429,848

Fuel consumption (Cargo) tonnes 161,416 118,789

Carbon Dioxide Emissions

Total CO2 emission (pax & cargo) tonnes of CO2/kg 5,427 4,878

CO2 per RPK (passenger only) gCO2/100 PK 123 130

CO2 per TK gCO2/100 TK 770 768

% of improvement in CO2/RPK (Since 2006) CO2/RPK 17.25% 12.13%

% of improvement in CO2/TK (Since 2008) CO2/TK 3.52% 3.82%

Total NOx emission during LTO kg 974,575 843,569

NOx emission per LTO kg 33 32

CO emission per LTO kg 14 13

Fuel Ground Vehicle

Petrol Liters 190,340 350,237

Diesel Liters 1,932,795 1,774,469

Energy

Etihad Headquarter & Training AcademykWh

1,501,981 1,408,867

Etihad Plaza (Offices and Common Area) 675,813 660,359

District Cooling

Etihad Headquarter & Training Academytonnes/hour

4,239,162 4,358,315

Etihad Plaza (Including residential areas) 3,009,064 3,274,599

Water

Etihad Headquarter & Training Academym3

74,202 81,560

Etihad Plaza (Offices and Common Area) 2,481 2,946

Waste

Paper and Cardboard recycled kg 24,775 17,300

Printer Cartridges recycled pcs 206 549

Aluminium (cans) recycled kg 0 240

Plastic (bottles) recycled kg 10 90

Etihad Complex General Waste kg 728,700 731,850

EN1, EN2, EN3, EN4, EN8, EN16, EN20, EN22


Driving economic growth in Abu DhabiAviation is a critical cluster industry within the Abu Dhabi Government’s 2030 Plan, in which a successful airline and airport are recognised as fundamental drivers of successful free-market commercial activity and vital to underpin a diverse economy in the global arena.

According to the latest study, completed in April 2011 by leading UK think tank, Oxford Economics, Etihad Airways plays a crucial role in supporting and driving economic growth in the UAE.

The research used the standard methodology for economic impact appraisals, and was based on data from the International Airline Transport Association (IATA), the Air Transport Action Group (ATAG), EUROCONTROL, the UK aviation industry, and the Civil Aviation Authority of Singapore (CAAS).

Economic contribution is classified into four key areas: direct (within Etihad Airways), indirect (suppliers to Etihad Airways), induced (spending of direct and indirect employees) and catalytic (impacts on other industries).

Creating wealth, creating jobsDirect economic contribution: The airline contributed US$1.46 billion (2.1 per cent) of Abu Dhabi’s non-oil GDP (or 0.8 per cent of total GDP) in 2011, and helped to generate and support nearly 104,000 non-oil jobs throughout the Emirate.

Our procurement policy guides the cost efficient and transparent purchasing of goods and services

and provides a standard framework for governance to create value and mitigate risk to Etihad Airways. While the use of local suppliers is always preferred, they are selected only where they are able to provide a service and/or product that is equivalent or superior to an external supplier based on the evaluation criteria specified in the supplier selection and tender process, which includes, but is not limited to price, quality, and experience. Indirect economic contribution: Etihad Airways made an indirect economic contribution of US$830 million and supported an additional 15,000 jobs in 2011 through fuel purchases, maintenance and repair, airport rental and landing fees, marketing, advertising, IT ventures and communications.

Induced economic contribution: An induced GDP contribution of US$760 million and 13,839 additional jobs can be attributed to money spent during 2011 by people working for Etihad Airways and its suppliers.

Catalytic economic contribution: Etihad Airways played an important role in improving air links between Abu Dhabi and the rest of the global economy, and the airline’s expanding network was a key factor in encouraging businesses to invest in the Emirate and the UAE. These activities provided a catalytic economic contribution of nearly US$4 billion, representing 5.3 per cent of the Abu Dhabi’s non-oil GDP (2.1 per cent), and supported nearly 68,000 jobs.

Etihad Airways was also a key contributor to the development and growth of tourism in the UAE.

In 2011 the airline carried 8.3 million passengers through its hub in Abu Dhabi. In 2012 this figure is set to increase to 10 million passengers.

Based on the airline’s current growth projections, Etihad Airways’ total economic contribution to Abu Dhabi’s GDP is on track to increase by 76 per cent to US$10.743 billion by 2015, helping to support 162,000 jobs in the Emirate.

Building a national workforceA key imperative for Abu Dhabi is the development of long term strategic initiatives aimed at empowering its national workforce, motivating young people, equipping them with the right workplace skills and enabling them to fulfill their potential and sustainably power the national economy in the long term.

One of our primary contributions to the local economy is through our Emiratisation program, which is a key business imperative mandated by the Board and fundamental to our human resources strategy. Ensuring that we attract and develop Emirati nationals to support our future growth, we adopted an integrated approach.

Source - aligning business requirements with community needs;Develop - aligning learning interventions with business and individual needs;Engage - fostering a conducive working environment; andDeliver - sustainably embedding Emirati talent at all levels within our workforce.

Aviation is a critical cluster industry within the Abu Dhabi government’s 2030 Plan, in which a successful airline and airport are recognised as fundamental drivers of successful free-market commercial activity and vital to underpin a diverse economy in the global arena.

38 Etihad Airways Corporate Social Responsibility Report 2011 Etihad Airways Corporate Social Responsibility Report 2011 39 EN5, EN18

Since the commencement of the Emiratisation program in 2007, we have invested a significant amount in the three main streams of the Emiratisation endeavour; the cadet pilot program, the graduate management development program, and the trainee engineering apprenticeship scheme. A total of 140 Emirati nationals have graduated from the programs since their inception. (See also Working Together)

In the four years since inception, the number of nationals within our workforce has grown from four per cent in 2007 to 21 per cent (excluding cabin crew and outstations) by the end of 2011, representing an impressive 98 per cent year-on-year increase.

Local innovation through partnershipEnvironmental performance and action to benefit the local community are intrinsically linked. Our ‘Together’ strategy ensures that anything we do, or support, adds value to local communities. Our engagement in research into feedstock for biofuel in Abu Dhabi with the Masdar Institute is a perfect example of this. The ‘integrated seawater energy agriculture system’ will create long-term value for local communities through the development of an economically viable aquaculture industry, creating work and prosperity in the less developed areas of the Emirate. For the aviation industry a potentially viable alternative to fossil fuel for this region is an exciting prospect.

Supporting the communityDespite the broader commercial imperative at the macro level of the country’s economy, we also participate in several projects and initiatives which positively and more directly impact and improve the lives of people in the local community.

SponsorshipEtihad Airways is proud to support a range of sporting and cultural events in the United Arab Emirates and worldwide. These sponsorships are consistent with the airline’s values of hospitality, team spirit, and helping bring Abu Dhabi to the world.

Our major sponsorships include the Formula 1 Etihad Airways Abu Dhabi Grand Prix, Manchester City Football Club, Etihad Stadium in Melbourne, Sport Australia Hall of Fame, GAA Hurling All Ireland Senior Championship, Harlequins Rugby Football Club and V8 Supercars Australia.

We work with our sports partners to develop Emirati sporting talent and support grass roots sport in the UAE in various community program properties including the F1 in Schools Program in conjunction with Mubadala; the Etihad Manchester City Soccer School Program reaching over 2000 children; the Etihad Harlequins Rugby Schools Program and Clinic, which in the last six years has reached over 3,000 children from schools in Abu Dhabi.

In 2011, Etihad Airways also supported several key international conferences, notably the Eye on Earth Summit and the Women in Leadership Conference held in Abu Dhabi.

Etihad Airways celebrated the 40th anniversary of the UAE’s National Day with a fly past across the seven emirates, in addition to sponsoring several other staff, community and sporting activities in Abu Dhabi.

2011 was designated as the ‘Year of Abu Dhabi’ to coincide with the launch of ‘essential abu dhabi’, a campaign to enhance Abu Dhabi’s standing as a top tourist and MICE destination through a range of promotional activities organised with major tourism operators in the Emirate.

Etihad Airways unveiled a special “Visit Abu Dhabi in 2011” livery on an Airbus A330-300 aircraft, which took off for a celebratory flight across the United Arab Emirates, with a group of special needs children from Zayed Higher Organization for Humanitarian Care and Special Needs, to take in some of the country’s top landmarks.

We also sponsored flights to Paris for a group of scholars from Zayed Higher Organization for Humanitarian Care and Special Needs for an

educational visit and provided tickets to support the Future Centre in Abu Dhabi.

UAE women – the core of the communityIn 2011, as an extension of our Emiratisation program, we opened a new call centre staffed entirely by Emirati women from Al Ain, the second largest city in the Emirate of Abu Dhabi and the fourth largest in the UAE with a population of 374,000 (2009). The complement of 80 staff includes the manager, seven team leaders, five quality executives and 67 agents. It has capacity to grow from its present size to accommodate 200 staff as the requirements of the business dictate.

The staff underwent a comprehensive six-month training program to equip them fully for employment. Courses covered soft skills, reservations systems knowledge and English language essentials. In addition to empowering a previously excluded sector of the local community, the centre will enhance the prosperity of Al Ain, providing a second income for many families and contributing directly and indirectly to economic growth and development in the UAE.

A unique collaboration with Sougha, a Khalifa Fund initiative, is working with women in the Western Region, to preserve traditional crafts in a range of modern products that are included in the duty free selection onboard Etihad Airways flights.

This project supports the economic inclusion and development of an otherwise marginalised rural community, the enhancement and creation of working opportunities for women, and the Emirate’s overall goal of economic diversification.

In October we marked breast cancer awareness month by sponsoring a campaign in the community to raise awareness of the disease and importance of early detection, offering free screening and education in collaboration with Lifeline Mobile Clinic in the city and other locations in the Emirate. We also sponsored Pink Polo at the Ghantoot Racing and Polo Club.


CONTINUOUS GROWTH

2005 2006 2007 2018 2009

35%

30%

25%

20%

15%

10%

5%

0%

Our workforceEtihad Airways recognises the value of a talented and diverse workforce, and is committed to valuing and promoting diversity in all areas of recruitment, employment, training and promotion. Etihad Airways will work towards an environment that is based on meritocracy and inclusiveness, where all employees can develop their full potential irrespective of their race, gender, marital status, language, age, disability, religious belief, socio-economic status, thinking styles, experience and education.

At the end of 2011, our total workforce comprised 9,038 employees, 7,672 of whom were based in Abu Dhabi with 1,366 located in 46 countries across our network. Of the total number of employees, 1,185 are pilots and 3,230 are cabin crew. There is a 48 to 52 per cent ratio of women to men.

Nearly all employees, (99.93 per cent) within the organisation are full time employees, with only a very small number of external consultants, (just 0.07 per cent of the total workforce), being retained on part time or temporary employment contracts.

Emiratisation – a national imperativeIn 2011 Etihad Airways employed 1,000 UAE nationals through a variety of programs and direct entry initiatives, and by year end they constituted 21 per cent of the employee base to become the second largest nationality grouping, compared to fifth in 2010. The increase in Emiratis in the workforce was accompanied by increased representation of Emiratis globally in cities across the network. An intake of 350 is projected for 2012 and then an average additional 200 each year thereafter.

The recruitment of Emiratis is conducted in collaboration with the Abu Dhabi Tawteen Council and supported by a mentorship and coaching scheme to further enhance their performance, effectively translate formal learning into the workplace and support them in pursuit of the objectives that form part of their Personal Development Plans. 2011 saw the introduction of several new programs to enhance and improve the current range. These include programs in IT, airport operations development, sales development, and finance development.

Etihad Airways recognises the value of having a talented and diverse workforce, and is committed to valuing and promoting diversity in all areas of recruitment, employment, training and promotion.

LA1, LA13, LA11, LA3, LA12

Location Headcount %

Outstations 1,366 15.11%

UAE 7,672 84.89%

Grand Total 9,038

Gender Headcount %

Female 4,374 48.40%

Male 4,664 51.60%

Grand Total 9,038

Age Group Headcount

<20 68

Between 20 and 25 784

Between 25 and 35 4,833

Between 35 and 45 2,321

Between 45 and 55 807

Above 55 225

Grand Total 9,038

Country Headcount %

United Arab Emirates 7,672 84.89%

Great Britain 195 2.16%

India 115 1.27%

Australia 92 1.02%

Pakistan 78 0.86%

Saudi Arabia 59 0.65%

Germany 49 0.54%

United States 47 0.52%2010 2011 2012YE

4% 4%6%

7%9%

13%

21%

27%

42 Etihad Airways Corporate Social Responsibility Report 2011 Etihad Airways Corporate Social Responsibility Report 2011 43 LA10, LA11, LA12

Currently in training We have a continuous focus on building aviation specific capability through training programs:

As the national airline of the UAE, Etihad Airways will continue to create opportunities in every part of its business to attract, develop and retain talented and committed UAE nationals. Ultimately the Emiratis from the various program will be empowered and developed to meet its future needs.

Learning and developmentIn 2011, the learning and development function designed and delivered several new learning interventions aligned with business requirements to enhance organisational performance.

State-of-the-art Academy resources include:− 32 classrooms− 1 auditorium (seating approx 120)− 4 flight simulators (1 x B777, 1 x A320, 2 x A330/340) − 1 Cabin Emergency Evacuation Trainer− 1 real Fire Fighting Trainer− 4 door trainers (Airbus & Boeing)− 6 computer-based training rooms

The Etihad Academy, now accredited by IATA, delivered almost 1,300 classroom-based courses to more than 12,700 participants in 2011. Core Etihad employees based in head office underwent an average of two hours training, with cabin crew averaging six hours of training for the year.

Trainees currently in training

Cadet Pilots

Second Officers

Trainee Engineers

Graduate Managers

Airport Managers

Total Trainees

Trainees 159 63 84 101 10 417

Males 152 60 76 44 9 341

Females 7 3 8 57 1 76

Our adoption of on-line learning proved to be very successful with a 500 per cent increase in on-line learning courses, an effective training solution for a global and mobile workforce which also delivers cost advantages to the airline. The shift to on-line learning delivery enabled a cost avoidance of AED10 million in 2011.

Competitive benefitsIn addition to very competitive remuneration packages, UAE based staff receive an end of service benefit in line with UAE labour legislation based on the years of service. Outside the UAE, payments to government pension plans are made in line with local labour legislation.

Our fulltime employees enjoy a wide range of benefits, including accommodation assistance, sports and recreational facilities, educational assistance to managerial staff, discounted air travel and cargo as well as access to medical care and medical insurance.

Performance management At the end of 2010 Etihad employees completed their first full year cycle in the new performance management system ‘iachieve.’ One hundred per cent of employees completed an end of year performance review in the first quarter of 2011 and the first performance-based pay increases were applied in April 2011. In tandem with this significant change, the company grading structure was redesigned with the introduction of job levels and a reduced number of grades while the number of job titles in the organisation was also reduced by over 30 per cent and a standard job title protocol introduced. Both these changes were key initiatives in reducing complexity and bureaucracy in organisation design. Further reinforcing the link between performance and reward, global incentive schemes were introduced in the Sales and Cargo divisions. The focus on ongoing dialogue between the employee and the manager continued through 2011 with almost 100 per cent of employees completing a formal end of year performance discussion.

JANUARY - DECEMBER 2011 COMPARATIVE ANALYSIS COURSES VS TRAINEES

JAN

2000

1500

1000

500

0

Total 1,391 courses and 13,915 traineesAverage trainees/month=1,159Average number of courses/month=115

FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Courses Trainees

We are committed to fairness in the workplace and recognise that a diverse workforce allows us to serve our stakeholders most effectively.

44 Etihad Airways Corporate Social Responsibility Report 2011 Etihad Airways Corporate Social Responsibility Report 2011 45 LA7

A positive workplace A safe workplace

Safety is Etihad Airways’ top priority. It lies at the heart of our business and is a core value across the entire organisation. The statement of commitment, policy and procedures are outlined in the airline’s safety manual, which supports the requirement for a company-wide Safety Management System and helps to embed safety in our working procedures and processes.

Safety Management System (SMS) Etihad Airways’ Safety Management System (SMS) is a comprehensive system designed to proactively manage health, safety and general risks in the workplace.

Mapped to ISO 14001 and OHSAS 18001 standards to ensure consistency with international best practice, the proactive SMS risk management strategy and tools provide a comprehensive and systematic way of identifying risks across the organisation and controlling and mitigating them to acceptable levels. It enables goal setting, planning and measuring performance, communication with staff, training, safety assurance and safety culture and reporting.

During 2011, a 61 per cent reduction in risk for identified hazards across all operational areas was achieved

The SMS also involves the airline’s third party suppliers and contractors, who are assessed and have to adhere to the SMS requirements and procurement ratification process.

Etihad Airways’ Safety Management System gained full approval by the Abu Dhabi Department of Transport and the Competent Department for Occupational Safety and Health Abu Dhabi in September 2011.

Etihad Airways commenced formal reporting on health and safety injury and lost days from that time, with 10 work-related injuries being recorded across the organisation by year-end. This resulted in two days’ lost time. There were no work-related fatalities recorded within the organisation in 2011.

Safety Action GroupsUnder the Abu Dhabi Environment, Health and Safety Regulatory framework, it is mandatory for Etihad Airways to consult with its employees in decisions affecting their health and safety. Within the Safety Management System (SMS) we have set up Safety Action Groups (SAGs) throughout the business to ensure that effective and appropriate EHS information is disseminated and communicated between management and employees.

The SAGs are also engaged in resolving health and safety issues, monitoring employees’ health and workplace conditions and ensuring that adequate training and information is provided on hazard identification, risk assessment and maintaining healthy and safe working conditions.

Consisting of representatives from nine key operational departments, the SAGs have been improved and expanded during 2011, to include representation from three key outstations across the global network. With between five and 15 staff per group, there are around 90 employees (or approximately one per cent of the total workforce) who are actively involved in disseminating EHS information and providing feedback between management and employees.

PR.2, LA6, LA8

We are committed to fairness in the workplace and recognise that a diverse workforce allows us to serve our stakeholders most effectively. We do not tolerate any form of discrimination or harassment directed at any individual or group on the basis of race, colour, religion, sex, national origin, citizenship, creed, age, marital or family status or disability.

This in entrenched in our code of conduct and non-compliance is subject to disciplinary action.

A healthy workplace - medical and employee wellbeing servicesSince opening its doors in 2010, the Etihad Airways Medical Centre has provided essential medical services to cabin crew and pilots. As services are regulated by both the Health Authority of Abu Dhabi and the General Civil Aviation Authority there is a natural emphasis on compliance with regulations and standards.

During 2011 our emphasis changed from not just achieving compliance but to achieving excellence. This was a necessary step in order to meet the needs of Etihad Airways. To achieve this objective medical services were restructured into distinct specialties: Aviation, General and Occupational medicine.

As access to services is critical for airline staff with variable and busy schedules, the Etihad Airways Medical Centre re-engineered internal business processes to provide flexibility and increase the number of available appointment slots, reduce waiting times and improve the service flow through the centre. In the next phase, opening hours will be extended and the capacity of the centre increased by providing additional consultation rooms so that a broader range of services can be provided for more staff and their families.

Recognising that prevention is better than a cure, and that a healthy workforce is happier and more productive, the Medical Centre partnered with the CSR team in a series of highly successful campaigns, including a breast cancer screening program, wellbeing days and a flu vaccination program. The Centre also encourages health and wellbeing in the staff newspaper, Etihad News, and promotes fitness and wellbeing through the Fit2Fly exercise programs at gyms and state-of-the-art sports facilities in five locations.

Etihad Airways is committed to supporting healthy lifestyles through its modern, dynamic gyms, rapidly expanding healthcare facilities and health education and promotion activities.

An active communityThe Etihad Sports and Social Committee is an independent and self funded group voluntarily constituted to promote sporting and social activities for employees and their families in Abu Dhabi. Sporting activities coordinated and promoted by the committee at tournaments and friendly club fixtures include football, squash, basketball, bowling, cricket, tennis and junior football.

Environmental health and safety trainingEHS training is fundamental for any workplace if it is to succeed in achieving its objectives. All training requirements are determined by the organisation’s Safety and Quality Department and overseen by the Health and Safety Division of the Abu Dhabi Department of Transport.

The training provided during 2011:− 220 core grade staff underwent EHS-specific induction training− 227 staff undertook fire fighting training− 800 crew underwent EHS specific induction training− 55 pilots underwent EHS specific induction training− 45 staff were trained as fire marshalls

Full regulatory complianceAll IATA member airlines are required to pass IOSA (IATA Operational Safety Audit), which is conducted every two years by an externally accredited audit organisation. In 2010 Etihad Airways passed a major UAE GCAA audit and the IOSA 2010 renewal, the latter being the most recognised operational safety accreditation in the airline industry. The program is comprehensive, consisting of 966 standards, subdivided into eight operational areas. Passing this with zero findings in 2006, 2008 and 2010 is a significant achievement demonstrating the very highest levels of safety.

There were no incidents of non-compliance with local regulations and voluntary codes, which was further validated following an unscheduled inspection by the Abu Dhabi Department of Transport in February 2012.


Corporate and individual philanthropy plays an important part in meeting our social responsibility. In 2011 we increased our commitment to local and international projects and initiatives that improve the lives and wellbeing of the communities in which we operate.

Crisis and humanitarian aidStaff in Japan and Thailand affected by the natural disasters during the year were supported in various ways, including the provision of alternate accommodation and a daily living allowance. Staff based in Abu Dhabi were given access to information and assistance hotlines to stay in touch with their families during the crises.

Our staff responded with generosity and compassion to the devastating earthquake and tsunami in Japan and the flooding in Thailand later in the year.

We extended our support for HRH the Prince of Wales Pakistan Relief Fund which continues to rebuild villages and communities still stricken by the 2010 floods.

Working with Airlink and Care by Air, Etihad Cargo transported large consignments of aid destined for Somalia in the wake of the civil war and famine.

Our association with Airlink strengthened and we were able to support several charities and organisations carrying out relief work in Thailand, the Philippines and Africa, flying passengers and cargo to areas in need.

Community engagement Our focus continued in the areas of individual and community empowerment and development. Extending the rationale and strategy in our workplace, we work in a variety of communities and with

In 2011 we increased our commitment to local and international projects and initiatives that improve the lives and wellbeing of the communities in which we operate.

SO.6

accredited programs to deliver opportunities, education and vocational training that in turn create employment and enhance the quality of life in communities. 2011 also increased engagement with cultural and artistic programs, and our continued support for those which promote multi-cultural dialogue. Etihad Airways does not provide any financial support to politicians or political parties. » Peace X Peace and Connection Point » Mosaic » Offscreen » Edge of Arabia Exhibition » National Museum of Australia –

Handwritten Exhibition » TEDx » Give and Gain Day » Islamic Relief » Islamic Museum of Australia » Maria Christina Foundation

and Scholarship Program » Child Welfare Scheme » Monyati » Medicimage » Palestine Children’s Relief Fund » Shelterbox » Pakistan Relief Fund » 2041 and International Antarctic Expedition » Pink Polo » Plurabelle Paddlers » F1 in Schools

Adding it all up in 2011We provided 170 free flights across our network for charities, community and cultural projects and waived 200 kgs of excess baggage for voluntary charity support.

Our frequent flyer customers donated a total of 31,422,850 Etihad Guest Miles to the 63 charities listed on the Etihad Guest shop.


Corporate governance

Corporate governance is rigorously enforced in line with the Manual of Authority through carefully defined structures and processes. The Manual of Authority outlines authority limits delegated by the Board to the Executive Committee, the executive team, management and staff in order to run the company’s affairs and operations.

The organisational structure ensures transparent reporting and necessary checks and balances. A 2009 report by leading global management consulting firm Oliver Wyman for the Abu Dhabi Audit Authority concluded that Etihad Airways had “established strong corporate governance and process redesign”.

Various layers of shareholder, management and regulatory oversight ensure continuous performance review against corporate strategic objectives and external standards.

Etihad Airways governance framework

Shareholder

Board Meeting – QuarterlyExecutive Committee – MonthlyAudit Committee – Quarterly

Management

Manual of AuthorityTender Board MeetingsInternal Audits

Regulatory

External Audit – KPMG AnnualFinancial Review – KPMG QuarterlyGovernment Audit – ADAA PeriodicOperations Audit – GCAA AnnualSafety Audit – IOSA Biennial

Meetings Objective Frequency Attendees

Board Meetings The Board meets the management of the company to ensure shareholder mandates are effectively implemented. The Board receives its authority from the shareholder and effectively delegates that to the management via the Manual of Authority.

Quarterly Board members, CEO, CFO and Chief Officers as required

Executive Committee Meetings

The Executive Committee meets management to discuss and authorise the carrying out of any activity deemed necessary to enable the company to achieve its commercial objectives and operational activities, and to review risks and formulate actions to address such potential risks.

Monthly A subcommittee of Board members, CEO , CFO and Chief Officers as required

Audit Committee The Audit Committee provide assurance to the Board over the qualification, independence, and performance of the registered public accounting firm (external auditor), and seeks advice from the company’s internal audit function as to the adherence to relevant governance standards.

At least five times a year

Two members of the Board, CEO, one independent member including a representative of Abu Dhabi Accountability Authority, Audit Committee Secretary (VP Internal Audit), CFO and other VPs as required

Chiefs Meetings The Chief Officers of the company meet to discuss and review performance to ensure the company achieves its commercial objectives. At this meeting the CEO updates his direct reports on issues affecting the company and feedback of Board, Executive Committee and other meetings. The Chief Officers update the CEO on issues and focus areas relating to their divisions.

Monthly CEO, Chief Officers

Performance Review Prioritisation Meetings

These meetings focus on the performance of the company including planned initiatives and continuous improvement.

Quarterly or as required

CEO, Chief Officers, PMO,

Cross functional VPs

Divisional Business Review Meetings (BRM)

The CEO meets with the management teams on a monthly basis to ensure the organisation’s performance is aligned to strategic objectives and a healthy operational environment exists. This is done through updating the CEO and other members of the BRM on initiatives, projects, risks and critical performance indicators and focus areas of the division.

Monthly CEO, Chief Officers, VPs, Departments Heads and Divisional Financial Controllers

Etihad’s management reporting frameworkEthics and complianceDuring 2011 Etihad Airways implemented a Fraud Control Policy and a reporting hotline (800 1919) to guide employees when faced with incidents of potential fraud.

A new Code of Business Conduct addresses workplace conduct with respect to business ethics, conflicts of interest and dealings with outside parties. Other policies used to guide employee actions; include the Competition Law Compliance Manual, Disciplinary Policy, the Fraud Control Policy, the Manual of Authority and the Social Media Policy Guidelines. Employees can seek guidance from the Compliance Office or the Ethics hotline.

Responsibility for administering the Code lies with the Ethics Committee, comprising the Vice President Internal Audit (Chair), the Chief People & Performance Officer, and the General Counsel. Oversight responsibility rests with the President and Chief Executive Officer, Audit Committee and the Board of Directors.

ComplianceWe take compliance very seriously and have compliance programs in the areas of Competition/Antitrust, Data Protection and Anti-corruption/Bribery. We are in the process of updating and relaunching our compliance programs in the Competition and Data Protection areas and recently launched an ethics hotline to enable our staff to report instances of corruption, bribery and other unethical behaviours. We require managers to undergo online training in these areas. All of our contracts have clauses dealing with compliance and we require our agents and suppliers in high risk areas to undertake competition compliance training.

GRI 4.1, GRI 4.6, SO7, SO8

Etihad Airways was not involved in any legal actions arising from anti-competitive behaviour, anti-trust, and monopoly practices and was not subject to any fines or sanctions for non-compliance.

Manual of AuthorityEnsuring that Etihad Airways operates to the highest ethical standards with strict compliance to corporate governance procedures is critically important.

Government of Abu Dhabi

Board of Directors

Executive Committee of the Board

COMMERCIAL MANDATE

Articles of Association

Manual of Authority

Contracts Manual

Tender Board

Audit Committee

External Audit

Internal Audit

Abu Dhabi Audit Authority

The airline’s Manual of Authority sets out its corporate governance processes and approval limits, which are intended to enable efficient decision making and approval processes without compromising the effectiveness of governance and business controls.

It was comprehensively reviewed for renewal by 2012 in line with international best practice and to accommodate the growth requirements of the business.

Executive Team


• World’s Leading Airline – World Travel Awards

• World’s Leading First Class – World Travel Awards

• World’s Leading Airline to the Middle East – World Travel Awards

• World’s Best First Class – Skytrax Awards

• World’s Best First Class Onboard Catering – Skytrax Awards

• World’s Leading Airline – Arabian Business Magazine

• Airline of the Year – TTG Travel Awards

• Best Business Class – Biz Travel Forum, Milan

• Business Airline of the Year – Guardian Observer Travel Awards

• Middle East’s Leading Airline – World Travel Awards

• Middle East’s Leading Airline First Class – World Travel Awards

• Middle East’s Leading Airline Inflight Entertainment – World Travel Awards

• Middle East’s Leading Cabin Staff – World Travel Awards

• Web Excellence, Airline category – Pan Arab Web Awards

• Best Co-Branded Card in the Middle East – Smart Card Awards Middle East

• Best Long Haul Airline – Irish Travel Awards

• Best Economy Class – Monitor Airline of the Year Awards

• Best Meal in Economy Class – Monitor Airline of the Year Awards

2011 Awards recognition of our excellence

CORPORATE SOCIAL RESPONSIBILITY REPORT 2011 · 2 Etihad Airways Corporate Social Responsibility...

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