LUSAKA (Reuters) – Ethiopian Airlines has signed a shareholding agreement with Zambia’s main develoment agency to relaunch the southern African country’s flag carrier at an initial cost of $30 million.

The Ethiopian state-owned carrier has outpaced regional competitors Kenya Airways and South African Airways to become Africa’s largest airline by revenue and profit, and has been buying shares in other African airlines to gain a competitive advantage over rivals such as those in the Gulf.

Under the plan, Zambia Airways, being revived more than two decades after it was shut down, would operate 12 planes by 2028, Ethiopian Airlines said in a joint statement with Zambia’s state-owned Industrial Development Corporation (IDC).

Ethiopian Airlines will own 45 percent of the revamped Zambian airline, and Zambia 55 percent, the statement said.

“The initial investment as we start up the national carrier will be $30 million. Obviously, as we operate the airline, we will facilitate the financing necessary to support its growth,” it said.

Ethiopian Airlines said in January it had signed an agreement with the Zambian government to relaunch Zambia Airways.

Zambia Airways will launch local and regional routes this year while intercontinental routes, including Europe, the Middle East and Asia, will be added in the near future, it said.

State-owned Zambia Airways went into liquidation in 1994. The privately-owned Zambian Airways then emerged as the country’s main carrier with flights to other major hubs in southern Africa, but it suspended operations in 2009.

Ethiopian Airlines operates and manages Malawi Airlines through a deal signed in 2013.

In May, the airline said it was in talks with Chad, Djibouti, Equatorial Guinea and Guinea to set up carriers through joint ventures. It also aimed to create a new airline in Mozambique that it will fully own.

Ethiopia said in June it would open Ethiopian Airlines and its state-run telecoms monopoly to private domestic and foreign investment in a major policy shift that will loosen the state’s grip on the economy.

Reporting by Chris Mfula; Editing by James Macharia and Adrian Croft