Ethiopia Looks to Its Airline for an Exports Boost

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Ethiopian Airlines

Bloomberg – Ethiopia is looking to its national carrier to help it navigate economic shocks from the coronavirus pandemic at a time when airlines across the world are approaching governments for bailouts.

The Horn of Africa country has relied on the Ethiopian Airlines’ network, connecting Africa to the Middle East, Asia, Europe and North America, to increase its exports by 13% to $2.4 billion in 10 months, according to Prime Minister Abiy Ahmed. Coffee shipments increased 16% to $667 million, while cut-flower cargo jumped 84% to $440 million in the period.

“Thanks to our airline, we have seen new customers that have faith in our logistics,” Abiy told lawmakers in the capital Addis Ababa on Monday.

Ethiopian Airlines, Africa’s biggest and most-consistently profitable carrier, almost doubled cargo capacity by converting 22 passenger planes to transport goods, adding to an existing fleet of 10 Boeing Co. 777 and two 737 freighters. That’s as others including Kenya Airways and South African Airways grounded most planes due to virus-related directives by governments, pre-existing financial problems or inadequate preparedness to lift more cargo.

Ethiopian Airlines was most prepared among African carriers to fill the gap left by governments suspending flights. From distributing Jack Ma’s virus-related donations across the continent, the carrier went on to airlift stranded cargo from across the region as well as more of its own produce.

The carrier will still lose almost $1 billion in ticket sales in the 12 months through June, Chief Executive Officer Tewolde GebreMariam said in May. It hadn’t yet needed to call on its state owner for direct funding, he said.

‘Huge Opportunity’

“Coronavirus has created a huge opportunity for our export growth,” Abiy said. The government took a decision to maximize the moment, he said.

Those shipments will help mitigate the effect of the virus on the economy, with the government seeing expansion of 6% in the year ending in July. That’s double the International Monetary Fund’s forecast and compares with the last financial year’s growth of 9%.

The government has increased investment in the health sector, set up 31 laboratories within three months that are able to test 8,000 samples a day. That capacity could almost be doubled in another month. Authorities have confirmed 2,156 Covid-19 infections and 27 deaths.

The cabinet will likely approve its 2020-21 budget next week, with a plan to increase spending by 23% to 467 billion birr ($13.6 billion).

2 COMMENTS

  1. Keep shining Ethiopia! you are in a good hand! keep showing these big numbers across the board.

    Proud of you!

  2. Ideal things to do while simulators & planes are idle and the sky is free of traffic:

    1. Pilot Type Rating: Train more Ethiopian pilots on various simulators and planes.
    2. Technician Type Rating: Train more Ethiopian techs on various planes & engines.
    3. Perform B/C/D Checks on planes & engines due for same in allowable ± X hours.
    4. Use same engine brand for same plane fleet for manpower training & management!
    5. Keep the most efficient, high capacity, twin engine planes whose simulators you already have: B737-800, B767-300-ER/F, B777-LR, B787-8/9 and A350-900.
    6. Limit each plane’s quantity to ≤ 25! That keeps you in business even if the whole fleet of any plane is grounded. It also leaves room for future fleet addition & expansion!
    7. Why order more planes with RR engines if you don’t get RR’s MRO Station Licence? Aren’t some of your planes rotting on the tarmac due to lack of service from RR?
    8. Build international standard domestic airports and upgrade existing ones! Then, slash domestic fares by ≈20% and use the B737-800 for domestic-regional routes.
    9. Stop wasting money, manpower and resources on the 71-seater Q-400s [Dash-8].
    10. Ask the government to build refineries near both Sudans and Djibouti for fuel!

    PS: Is the airline participating in Addis Ababa’s Projects like Feeding School Kids, Building Mega Bakeries, Beautifying Addis, COVID-19 Containment, etc.?

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