Etihad Airways said it raised $1.2 billion in global aviation's first sustainability loan linked to environmental, social and governance goals.
The deal is the airline's third sustainable financing transaction as it pledged in 2020 to reach net-zero carbon emissions by 2050.
The structure of the loan, which was closed on October 1, includes a $500 million four-year tranche and a $700m five-year tranche, Adam Boukadida, chief financial officer of Etihad Aviation Group, told The National.
“This will be by far the biggest of three green transactions that we've done over the last three years and is the first ESG-linked loan for Etihad and for aviation globally,” he said. “It's a sizeable transaction and sustainable financing is very much part our finance DNA and a key part of our strategy now and in the future.”
The transaction is the largest sustainable financing in the airline’s history and follows two aviation financing deals — a $600m sustainability-linked transition sukuk in 2020 and a 100m euro loan tied to the UN Sustainable Development Goals in 2019. Etihad also runs the Greenliner programme, which uses its fleet of Boeing 787 Dreamliners as a test-bed for sustainable flight initiatives.
The Covid-19 pandemic has increased global concerns about climate change threats, with governments promising to build back greener and borrowers establishing ESG frameworks as part of that transition. Global airlines are keen to improve their green credentials to address passenger concerns about climate-related issues and to counter the “flight-shaming” movement that began in Europe. Last week, airlines around the world accelerated their climate goals and committed to net-zero carbon emissions by 2050 as they face increasing pressure from environmental activists and politicians.
Proceeds of the loan will be used for general corporate purposes, Mr Boukadida said.
The airline has committed to penalties and incentives of up to $ 5.5m linked to its progress against key performance indicators on the ESG loan.
The loan is linked to several performance metrics on ESG goals.
The environmental goal involves reducing carbon emissions from passenger aircraft (measured in terms of CO2 emissions per revenue tonne kilometres). The airline has set key milestone goals for 2035 and 2025 as part of its net-zero target for 2050.
The social goal will focus on gender diversity. At its Global Business Service Solution (GBSS) centre in Al Ain, which handles functions from HR support to global revenue audits and has a majority female workforce of 300, Etihad will focus on increasing female participation and continuing training and development.
The final governance metric will be linked to the Integrity Score, a comprehensive measure used to assess the overall internal culture of integrity at the airline.
Work on these goals will start with “immediate effect” and the airline will have an annual reporting cycle along with the solicitors and lenders, Mr Boukadida said.
Etihad Airways picked HSBC and First Abu Dhabi Bank (FAB) as the strategic partners and financiers for this transaction. HSBC and FAB were the joint ESG structuring banks, joint ESG coordinators, joint bookrunner and mandated lead arranger. FAB also acted as facility agent.
The airline has an appetite to further explore green financing opportunities in future "where it make sense and it's aligned to our overarching transformation and sustainability strategy” and is right for all parties involved, the chief financial officer said.
“Next year, we will be taking some incremental aircraft and, if it makes sense and it's appropriate to do so, we will look about how we can finance those if required, with sustainable financing yet again," he said.
Asked about the outlook for Etihad's second-half financial performance, Mr Boukadida said he expects a similar performance as the first half of the financial year. The airline halved its operating loss in the first six months of 2021 as it reduced costs and expanded its cargo business.
"Our first half performance, despite the loss, is actually pretty good... with a fair degree of confidence, we can expect to see a similar performance in the second half," he said. "But we've still got the second half of the second half to conclude."
"As long as we have the demand and the ability without constant changing restrictions to fly our guests into or via Abu Dhabi, I am confident that we will close the second half equally as strongly as we did in the first half, " he added.
It continues to focus on its previously stated target of returning to profitability in 2023, Mr Boukadida added.
BOSH!'s pantry essentials
Nutritional yeast
This is Firth's pick and an ingredient he says, "gives you an instant cheesy flavour". He advises making your own cream cheese with it or simply using it to whip up a mac and cheese or wholesome lasagne. It's available in organic and specialist grocery stores across the UAE.
Seeds
"We've got a big jar of mixed seeds in our kitchen," Theasby explains. "That's what you use to make a bolognese or pie or salad: just grab a handful of seeds and sprinkle them over the top. It's a really good way to make sure you're getting your omegas."
Umami flavours
"I could say soya sauce, but I'll say all umami-makers and have them in the same batch," says Firth. He suggests having items such as Marmite, balsamic vinegar and other general, dark, umami-tasting products in your cupboard "to make your bolognese a little bit more 'umptious'".
Onions and garlic
"If you've got them, you can cook basically anything from that base," says Theasby. "These ingredients are so prevalent in every world cuisine and if you've got them in your cupboard, then you know you've got the foundation of a really nice meal."
Your grain of choice
Whether rice, quinoa, pasta or buckwheat, Firth advises always having a stock of your favourite grains in the cupboard. "That you, you have an instant meal and all you have to do is just chuck a bit of veg in."
One in four Americans don't plan to retire
Nearly a quarter of Americans say they never plan to retire, according to a poll that suggests a disconnection between individuals' retirement plans and the realities of ageing in the workforce.
Experts say illness, injury, layoffs and caregiving responsibilities often force older workers to leave their jobs sooner than they'd like.
According to the poll from The Associated Press-NORC Centre for Public Affairs Research, 23 per cent of workers, including nearly two in 10 of those over 50, don't expect to stop working. Roughly another quarter of Americans say they will continue working beyond their 65th birthday.
According to government data, about one in five people 65 and older was working or actively looking for a job in June. The study surveyed 1,423 adults in February this year.
For many, money has a lot to do with the decision to keep working.
"The average retirement age that we see in the data has gone up a little bit, but it hasn't gone up that much," says Anqi Chen, assistant director of savings research at the Centre for Retirement Research at Boston College. "So people have to live in retirement much longer, and they may not have enough assets to support themselves in retirement."
When asked how financially comfortable they feel about retirement, 14 per cent of Americans under the age of 50 and 29 per cent over 50 say they feel extremely or very prepared, according to the poll. About another four in 10 older adults say they do feel somewhat prepared, while just about one-third feel unprepared.
"One of the things about thinking about never retiring is that you didn't save a whole lot of money," says Ronni Bennett, 78, who was pushed out of her job as a New York City-based website editor at 63.
She searched for work in the immediate aftermath of her layoff, a process she describes as akin to "banging my head against a wall." Finding Manhattan too expensive without a steady stream of income, she eventually moved to Portland, Maine. A few years later, she moved again, to Lake Oswego, Oregon. "Sometimes I fantasise that if I win the lottery, I'd go back to New York," says Ms Bennett.
Most F1 world titles
7 — Michael Schumacher (1994, ’95, 2000, ’01 ’02, ’03, ’04)
7 — Lewis Hamilton (2008, ’14,’15, ’17, ’18, ’19, ’20)
5 — Juan Manuel Fangio (1951, ’54, ’55, ’56, ’57)
4 — Alain Prost (1985, ’86, ’89, ’93)
4 — Sebastian Vettel (2010, ’11, ’12, ’13)
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US households add $601bn of debt in 2019
American households borrowed another $601 billion (Dh2.2bn) in 2019, the largest yearly gain since 2007, just before the global financial crisis, according to February data from the New York Federal Reserve Bank.
Fuelled by rising mortgage debt as homebuyers continued to take advantage of low interest rates, the increase last year brought total household debt to a record high, surpassing the previous peak reached in 2008 just before the market crash, according to the report.
Following the 22nd straight quarter of growth, American household debt swelled to $14.15 trillion by the end of 2019, the New York Fed said in its quarterly report.
In the final three months of the year, new home loans jumped to their highest volume since the fourth quarter of 2005, while credit cards and auto loans also added to the increase.
The bad debt load is taking its toll on some households, and the New York Fed warned that more and more credit card borrowers — particularly young people — were falling behind on their payments.
"Younger borrowers, who are disproportionately likely to have credit cards and student loans as their primary form of debt, struggle more than others with on-time repayment," New York Fed researchers said.
Evacuations to France hit by controversy
- Over 500 Gazans have been evacuated to France since November 2023
- Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
- The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
- Artists and researchers fall under a programme called Pause that began in 2017
- It has benefited more than 700 people from 44 countries, including Syria, Turkey, Iran, and Sudan
- Since the start of the Gaza war, it has also included 45 Gazan beneficiaries
- Unlike students, they are allowed to bring their families to France
UAE currency: the story behind the money in your pockets
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The years Ramadan fell in May
