Ethiopian Airlines steps up hunt for African connections

Published: November 23, 2018 16:39:04 | Updated: November 25, 2018 10:51:15


Ethiopian Airlines' newly acquired Boeing 777-300ER aircraft. File photo

Ethiopian Airlines is accelerating its strategy of weaving a patchwork of new African routes to soak up traffic on the continent and fly customers towards its more lucrative flights to rapidly expanding Asian markets.

With a long-delayed African “open skies” revolution still mired in red tape, Ethiopian has been snapping up stakes in small carriers around the continent to pre-empt potential rivals and become the dominant pan-African airline.

The carrier is in talks with Democratic Republic of Congo, Congo Republic and Djibouti about either launching airlines or securing landing spots, said CEO Tewolde GebreMariam.

He also said in May the airline was looking to set up carriers in Equatorial Guinea and Guinea through joint ventures.

“The task of African integration is not easy,” Tewolde said in an interview. “The context is the need for air transport. There is huge demand. We are responding to it.”

Ethiopian’s push comes as Middle Eastern rivals who expanded heavily in Africa are feeling some pain from overcapacity, while African carriers such as South African Airways and Kenya Airways are on the back foot after losing money for years.

The success or failure of Ethiopian’s plan is being watched by long-haul competitors such as Turkish Airlines and suppliers led by Boeing and, more recently, Airbus.

Ethiopian’s fortunes are also important for Prime Minister Abiy Ahmed’s government, which has said it plans to sell a minority stake in the airline to domestic and foreign investors as part of broad economic reform pledges.

Ethiopian unveiled its 15-year expansion strategy in 2010, and started small. First it helped launch ASKY Airlines in the West African country of Togo and then acquired a 49 per cent stake in Malawi’s flag carrier in southern Africa in 2013, according to Reuters.

Since May, Ethiopian has announced plans to launch an airline in Mozambique, relaunched Zambia’s flag carrier, established a new airline in Chad to cover West and Central Africa and resumed flights to Somalia after a 41-year hiatus.

The prize is growing fast. Air traffic in Africa is forecast to grow 6 percent a year, twice as quickly as mature markets and faster than any other region over the next two decades.

Ethiopian is hoping to snare a greater share of capacity on flights between cities in Africa, which are already 90 per cent controlled by African carriers, according to data firm OAG.

In most cases so far, Ethiopian has taken minority stakes in “start-up” airlines and tried to implant its management culture, often in nations haunted by costly failures of state carriers.

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