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Why Ethiopian Airlines is Bucking a Continent-wide Trend




INSIDE the atrium of a gleaming new building on the outskirts of Addis Ababa, trainee air stewards flit between the classrooms and aeroplane simulators that surround a large indoor swimming pool. The expensive aviation academy belongs to Ethiopian Airlines, and seems a world away from the unrest that on October 9th prompted the government to declare a national state of emergency. The firm’s CEO, Tewolde Gebremariam, brushes off the idea that the airline will be affected. “We are not concerned,” he shrugs.

He has reason to be confident about the business. Ethiopian is Africa’s largest and most profitable airline, earning more than its rivals on the continent combined. Its expansion has been rapid: by 2015 it served 82 international destinations, with 13 more added this year. According to unaudited figures, it nearly doubled its profits in the last financial year (see chart). And that is amid national turmoil.

It helps that its regional rivals are competing only feebly on routes in Africa. According to the International Air Transport Association, African carriers are likely collectively to record a net loss of $500m this year. Kenya Airways, which has been in the red for four years on the trot, is flogging some of its aircraft and last month announced it would raise more equity. South Africa’s national carrier, which Ethiopian overtook in size last year, has been unprofitable since 2011, and could be insolvent without government guarantees.

Ethiopian’s lead also comes from its own strengths. It took advantage of its plum location in the Horn of Africa. Mr Gebremariam circles Addis Ababa on a line connecting China with Brazil via India and the Gulf. It beat rivals who were still fixated on the former colonial routes to and from Europe, and captured Asian traffic. In particular it took an early punt on Chinese demand. In 1973 it was the first African carrier to fly to China. Today a bustling Chinese transit counter at Addis Ababa’s Bole airport testifies to the importance the company attaches to the market. And Ethiopian has reduced flights to small African capitals like Brazzaville, in the Republic of Congo, which offer little business, in favour of more flights to the country’s booming oil port of Point Noire

Finish reading the story at The Economist.

Freddie Allen is the Editor-In-Chief of the NNPA Newswire and BlackPressUSA.com. Focused on Black people stuff, positively. You should follow Freddie on Twitter and Instagram @freddieallenjr.

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