Etihad 1H2014 results: The model's rapid evolution even more remarkable than a 28% revenue increase

It was never a question of if Etihad Airways would report revenue growth in 1H2014; the only question was the exact double-digit percentage by which it would grow. Etihad reports group revenue increased by 28%, a remarkable figure even by fast-paced Gulf standards, and one that stole most headlines. But total revenue has also been positively impacted by Etihad's acquisition of ground-based services.

Passenger revenue grew by a "slower" 14% - below the 19% increase in ASKs, although probably not all that remarkable in the short term with this rate of expansion. Yields, load factor and RPKs (in addition to profit figures) were not disclosed. Possible slowing of momentum comes as Air France-KLM and the Lufthansa Group in a letter to the European Commission accused all Gulf carriers of "excessive growth".

Etihad's acquisition of ground services has clearly helped add diversification to the model, with passenger revenue now comprising only 64% of total group revenue, lower than at Emirates or Lufthansa. Partner revenues are likely to surpass USD1 billion in 2014, but the more significant figure is 1H2014 partner revenue accounting for 23% of total passenger revenue. This too will grow as new partnerships - including major ones with Jet Airways and Alitalia - bed down. Putting planes into the sky is relatively easy; selling their seats is the challenge.

Leaving aside the controversy, Etihad is creating a remarkable new model that continues to grow multi-dimensionally in ways that detractors might be wise to concentrate on - rather than merely accelerating their efforts to rescind change.