Etihad Airways posted a record first-half profit as long-haul travel revived with the easing of coronavirus curbs and the Gulf carrier added flights to European resorts to tap pent-up demand for vacations.

The Abu Dhabi-based company had a core operating profit of $296 million in the first six months, compared with a loss of $392 million a year earlier, even after fuel costs increased by almost 60%, it said in a statement Thursday.

Passenger loads increased consistently over the period as bookings recovered and Abu Dhabi further relaxed pandemic-related restrictions from February. Occupancy levels are currently above 90% with flights in August and September largely booked up, Chief Executive Officer Tony Douglas said in an interview.

Etihad coped better with the Covid pandemic than many other airlines after a major downsizing from 2017 slashed costs and repositioned it as a mid-size carrier. The company had racked up billions of dollars in losses under a previous strategy of focusing overwhelmingly on inter-continental markets.

Douglas said that while Etihad is emerging from the pandemic stronger than it went in thanks to the transformation program already being in place, it will continue to “build in a very controlled way only where it’s profitable.”

In particular, the airline needs to carefully manage the transition to serving more eastbound markets once China fully reopens to international travel.

“Without China coming online we’re already getting to the stage where our capacity is being fully utilized,” he told Bloomberg television. “We’ve got a high-class problem, the first time we’ve had a situation like this.”

Delivery Concern

One concern, Douglas said, is that as it seeks to tap Asian demand Etihad could encounter a “pinch point” with the handover of 787 jets from Boeing Co., which has put deliveries on hold amid production snags, and A350s from Airbus SE, which is grappling with supply-chain issues.

The quality of Etihad’s “guest experience” at many European airports is meanwhile suffering because of a staffing crisis there that shows little sign of easing any time soon, the CEO said.

All the same, ticket yields -- or fares -- are high and business-class cabins “have never been more full.” That helped triple global passenger sales in the first six months, aided by seasonal flights to locations such as Nice in France and holiday islands in Greece popular with Emiratis seeking to escape Abu Dhabi’s sweltering summer heat.

Cargo revenue gained 6% even as volumes carried dipped by almost a fifth, with belly-hold space increasingly filled with customer bags.

Etihad didn’t provide a full-year outlook, though Douglas said in April it was possible the carrier would show positive earnings for all of 2022, one year ahead of schedule, after turning profitable in the first quarter.