IAI partners with Ethiopian Airlines to open plane conversion centre

Israel Aerospace Industries (IAI) recently announced a partnership with Ethiopian Airlines to open a center in Ethiopia dedicated to converting passenger aircraft into cargo planes. This move comes at a time when passenger-to-freighter conversions are emerging as a rare growth sector globally, particularly in the African freight market. To discuss this trend, Sindy Foster, Managing Partner at Avril Capital Partners, joined CNBC Africa for an insightful interview. Foster highlighted the impact of the pandemic on the aviation industry, particularly on the cargo sector, and the strategic decisions made by Ethiopian Airlines to capitalize on the evolving market dynamics. Despite the challenges posed by the pandemic which led to border closures and limited international flights into the continent, Ethiopian Airlines saw an opportunity in utilizing passenger aircraft for cargo transportation. This shift not only enabled the airline to continue operations but also positioned them as a leader in adapting to the changing landscape of the aviation industry in Africa. Foster emphasized the importance of regulatory support in facilitating such transitions. Ethiopian Airlines' proactive approach and alignment with regulatory authorities allowed them to swiftly implement changes and seize the opportunity to expand their cargo operations. In contrast, some airlines faced delays due to regulatory roadblocks, hindering their ability to capitalize on the growing demand for cargo transportation. Ethiopian Airlines' strategic investments in infrastructure, such as a cargo terminal before the pandemic, also played a crucial role in their success. The airline's financial stability and operational efficiency further set them apart, enabling them to navigate the challenges posed by the pandemic effectively. Foster also shed light on the economic implications of converting passenger aircraft into freighters. While the cost of conversion is relatively cheaper than purchasing new freighter aircraft, the process requires meticulous planning and investment. With a significant number of older aircraft in operation across Africa, there is a readily available supply that can be converted to meet the increasing demand for freighter aircraft. Looking ahead, Foster predicted a shift towards a more diversified business model in the aviation industry, with a mix of passenger and cargo-focused airlines. The surge in demand for transporting essential goods like PPE and vaccines during the pandemic has underscored the necessity of a robust cargo fleet. Additionally, the implementation of the African Continental Free Trade Agreement has paved the way for increased e-commerce activities, driving the need for efficient cargo transportation services within and across African nations. As Ethiopian Airlines leads the way in embracing these changes and expanding its cargo operations, other airlines are likely to follow suit to ensure resilience and sustainability in the evolving aviation landscape in Africa.