Ethiopian Airlines Invites African Countries to Buy its Shares
Ethiopian Airlines is undisputedly Africa’s largest airline by revenue and profit. Yet the state-owned carrier just doesn’t want to dominate the continent’s skies: it’s also looking to boost Africa’s fragmented airspace through increased connectivity, forming strategic alliances, besides launching or reviving new sovereign African airlines. Ethiopian’s latest pitch is that it shouldn’t just be Africa’s top airline in passenger numbers and destinations but also in its ownership structure. The company’s head Tewolde Gabremariam, suggested the airline should be co-owned by African governments. Tewolde said Ethiopia’s government should capitalize on the airline’s stature to consolidate its place in the African continent. “As a Pan-African airline, I don’t see any reason why we should not sell the minority shares of Ethiopian Airlines to African countries if they are interested in buying.”
More than anything, Tewolde’s bullish statement is reflective of the bold new era in Ethiopia. Since prime minister Abiy Ahmed came to power in April, he has overseen radical reforms that have changed the country’s trajectory. These include introducing a major policy aimed at loosening the government’s monopoly on several key economic sectors, including aviation and telecommunications. Tewolde’s words are also indicative of ET’s record success in improving its financial, operational, aircraft fleet, and annual passenger numbers. In the fiscal year ending July 2018, the carrier announced it bought a 45% stake to revive Zambia Airways, which went into liquidation way back in 1994.
To spread its regional footprint, it also kickstarted negotiations to establish new hubs in Mozambique, Chad, and Equatorial Guinea in addition to the ones it already operates in Malawi and Togo. And as part of its efforts to launch and manage new African haulers, the company recently said they were the lead contestant in a tender aimed at setting up Nigeria’s new national airline.
Looking to tap into improving intra-African travel, ET increased its African network to over 58 out of its over 100 international destinations, introducing flights to Kaduna, Nigeria; Kisangani in DR Congo, and Nosy-Be in Madagascar. In late July, the airline announced a deal with DHL to build the leading cargo logistics center in Africa. To attract more than its current 10.6 million passengers, the airline introduced a plan enabling travelers to discover and experience the many historical, cultural, religious and natural treasures of Ethiopia. As of June, Ethiopia introduced an e-visa service to all international visitors, easing access for passengers with layovers to enter the country.
Ethiopian has managed this even as airline performance in Africa remained weak, load factors remained inadequate, jet fuel prices rose, and competition stiffened from international carriers like Emirates. Tewolde says they hope to replicate the past “exceptional year” in the 2018/19 fiscal year.
One thing that will aid Ethiopian’s ambitions will the opening by the end of 2018 its China-built terminal upgrade in its main hub in Addis Ababa, effectively improving its on-ground customer service.