Etihad Says Growth Threatened by Protectionism

DUBAI—Etihad Airways on Thursday said potentially aggressive protectionist policies in the U.S. and Europe threaten to limit growth at the Abu Dhabi-based carrier, which flew significantly more passengers on its network last year and posted record profits.

Etihad, along with Emirates Airline and Qatar Airways, has faced ongoing criticism this year from the three biggest U.S. carriers—Delta Air Lines Inc., American Airlines Group Inc. and United Continental Holdings Inc. They claim Etihad and its Gulf peers have received $42 billion in subsidies and unfair benefits since 2004, including about $17 billion for the Abu Dhabi airline. All three Gulf airlines deny the claims. European carriers Lufthansa AG and Air France-KLM SA also have pressed their governments to limit Gulf carriers growth.

Etihad and its partner carriers such as Alitalia and Air Berlin PLC face "unprecedented external challenges" as some rivals in the U.S. and Europe are lobbying their governments to limit access to the airline, Chief Executive James Hogan said.

"These attempts to limit competition are detrimental to consumer choice," Mr. Hogan said in a statement announcing his airline's full-year results. "They threaten to damage the significant progress that our airline has made."

Mr. Hogan's comments come just a week after the Netherlands moved to temporarily halt granting additional slots to the Gulf carriers amid calls for wider such limitations.

Etihad recorded a net profit of $73 million last year, up from $48 million the previous year, on revenue of $7.6 billion, the airline said. It flew 22% more passengers at 14.8 million, while its equity partnership program with other airlines around the world added $1.1 billion to revenue.

The robust set of results will be closely watched in the West, and they follow an equally strong performance at Dubai-based Emirates Airline, which earlier this month reported its second-highest ever annual profit on lower fuel costs and a positive performance in Europe and the Americas.

Companies such as Delta, British Airways' parent International Consolidated Airlines Group SA and American Airlines have also reported growing profits in recent months on weak oil prices and a more positive economic outlook in the U.S. and some markets in Europe.

Etihad's 2014 earnings are likely to be questioned by some U.S. and European carriers, like in the past, as the Abu Dhabi airline releases only a short statement to the public and doesn't normally publish detailed audited financial statements. The U.S. carriers claim Etihad receives regular state aid from the government of Abu Dhabi, which isn't disclosed in its annual release to the public.

Etihad, for example, reported a net profit in 2013 of $48 million in a statement released on its website. But according to financial documents obtained by the U.S. carriers, Etihad's auditor KPMG LLP said it had prepared the 2013 statements based on approval of $3.5 billion in additional shareholder funding by Abu Dhabi's ruling body, a disclosure the airline didn't make when reporting its full-year figures. Etihad declined to comment.

Etihad, meanwhile, has gone on the offensive in recent weeks against the U.S. carriers' claims. The airline issued a report by Risk Advisory Group, a London-based investigation and intelligence firm, claiming the three largest U.S. airlines—Delta Air Lines Inc., American Airlines Group Inc. and United Continental Holdings Inc.—have in total received $70 billion in government and court-sanctioned benefits.

Etihad also said it would contribute $2.9 billion this year to the U.S. economy and support 23,400 American jobs.

Write to Rory Jones at rory.jones@wsj.com

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