Abu Dhabi’s long-troubled Etihad Airways said on Tuesday it would sell 38 aircraft to an investment firm and a leasing company in a deal valued at $ 1 billion, the latest cost-cutting measure by the United Arab Emirates’ national carrier.

Etihad said it would sell 38 aircraft — 22 Airbus A330s and 16 Boeing 777-300ERs — in the deal with investment firm KKR and leasing firm Altavair AirFinance. KKR said the Boeing 777-300ERs will be leased back to Etihad upon purchase in early 2020,” while the Airbus A330s will go to international clients.

Etihad described the move as being in line with the third year of its transformation program. The deal offers us flexibility while ensuring we stand by our sustainability targets and maintain a fleet of the most fuel-efficient, technologically advanced aircraft, the airline said in a statement.

Etihad’s website lists itself as having a fleet of 102 aircraft. It no longer lists its A330s among its fleet, having said it would begin phasing those aircraft out. The 16 Boeing 777s it will sell and lease back represent 15 per cent of its current fleet.

Since 2016, Etihad has lost a total of $ 4.75 billion as its strategy of aggressively buying stakes in airlines from Europe to Australia to compete against Emirates and fellow rival Qatar Airways exposed the company to major losses.

Etihad lost $ 1.28 billion in 2018. It has yet to release results for 2019. In the time since 2016, it has embarked on a cost-cutting initiative and recently announced it would restructure planned aircraft purchases from Airbus and Boeing.

The airline reported revenues of $5.86 billion in 2018, down from $ 6 billion in 2017. It flew 17.8 million passengers last year, down from 18.6 million the year prior.

Previously, Etihad reported losses of $ 1.52 billion for 2017 and $ 1.95 billion in 2016. It blamed challenging market conditions and effects of an increase in fuel prices in part for the loss in 2018.

Abu Dhabi’s rulers launched Etihad in 2003, competing with the established Dubai government-owned carrier Emirates that flies out of Dubai International Airport only 115 kilometres (70 miles) away. In 2018, Etihad began loaning pilots to Emirates under a new program. Both Emirates and Etihad have seen business hurt by President Donald Trump’s travel bans affecting Muslim-majority nations.

That’s even with Abu Dhabi International Airport having a U.S. Customs and Border Protection pre-clearance facility, allowing passengers arriving in America to immediately leave. It’s the only such facility in the Mideast.

The two airlines are government-owned carriers in the United Arab Emirates, a federation of seven sheikhdoms on the Arabian Peninsula. Both compete in the long-haul carrier market, using their nation’s location between East and West to their advantage.

Both airlines continued to fly to China amid the ongoing outbreak of the new coronavirus, even as other Western and Arab airlines stopped. On Monday, UAE civil aviation authorities halted all flights to China, except for those going to Beijing.

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