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Ethiopian Airlines and South Africa&#8217;s Airlink are well positioned to come out as the biggest winner from the COVID-19 pandemic but are they looking at bleak skies with the slow economic recovery? Derek Nseko, MD Ifly Global Aviation joins CNBC Africa for more

These African airlines are positioned to emerge winners from COVID-19 crisis

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In Ethiopia, the government announced suspension of the planned partial privatization of national carrier Ethiopian Airlines.

Ethiopia suspends plan to privatise national carrier

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Ethiopian Airlines has unveiled a new terminal at Bole International Airport, making it the largest gateway to Africa. The airport now has a capacity of 22 million passengers annually. At the same time, the country’s Ministry of Health announced that the country will start manufacturing its own COVID-19 test kits with China’s help. And Ethiopia has received about $14.85 million grant from the global partnership for education to boost its response to disruptions caused by the coronavirus pandemic. Economic Analyst, Samuel Getachew, joins CNBC Africa for more.

Ethiopia to make and export COVID-19 test kits

By Irmgard Erasmus – Senior Financial Economist



Acutely aware of Ethiopia’s vulnerability to the health and
economic repercussions of the Covid-19 pandemic, Prime Minister Abiy Ahmed
urged “collective leadership and coordinated responses” to overcome the
challenges posed by the unprecedented shock. 



The Ethiopian leader has taken a dominant position in the campaign
for comprehensive stimulus packages and debt relief for the African continent,
stressing that “we are not prepared to overcome the virus on our health systems
and the long-term impact on our economies”. 



Echoing this concern, a consortium of African ministers of finance
emphasised in a communique dated April 1 that “urgent need” exists “for fiscal
stimulus to contain the crisis”.



On April 1, G20 leaders indicated that they are preparing a
response package for Africa that will include debt relief and financial aid.
The response package will incorporate “recent demands from President Cyril
Ramaphosa of South Africa and Prime Minister Abiy Ahmed of Ethiopia”, according
to Politico. 



This also came after the United Nations Economic Commission for
Africa (UNECA) again requested the “urgent and immediate release” of a $100bn
support package to aid domestic response actions in the fight against the
health and economic implications of the Covid-19 pandemic. 



While the ministers welcomed the IMF and World Bank’s call for
official bilateral creditors to “provide breathing space” to African countries,
the consortium believes that “such relief should be extended to countries
across the region and by other creditors during this exceptional period”. 



A comprehensive $100bn support package for Africa will be
formalised for discussion and presentation at the World Bank and IMF’s
stakeholders’ initiatives on April 15.



For the public sector, disbursements will be utilised for the
servicing of public sector debt and interest payments, including on sovereign
bonds, in order to create “immediate fiscal space and liquidity” for
governments to focus their attention on domestic fiscal stimulus needs amid the
crisis. 



The consortium proposes that the $44bn disbursement be pooled into
a global special purpose vehicle (SPV) to be used for external debt service
“for effective management purposes till economic recovery takes hold and
agreement can be reached with creditors”. The ministers stressed that this
measure would guard against default by countries. 



The ministers requested the IMF to raise Special Drawing Rights
(SDRs) availability over the next two to three years. The consortium believes
that it would service the debt relief SPV facility and provide crucial
liquidity support.



Ethiopia has already rescheduled debt servicing agreements with
“some major creditors”, which will alleviate hard currency liquidity demands.
By September 2019, public external debt stock stood at $26.8bn, or half of
total outstanding public debt. 



Public external debt comprised a 60:40 split between central
government and state-owned enterprises, according to official records. 



Public external debt servicing costs amounted to $548.4m during Q1
FY 2019/20 (the fiscal year commences on July 8), of which $457.2m was due to
SOE debt servicing. 



Ethiopia has been among the most vocal of African nations to
request debt waivers or debt relief – while African finance ministers called
for a $100bn stimulus package, Prime Minister Abiy Ahmed urged G20 members to
provide $150bn under a proposed three-point action plan. The disbursal should
take the form of supplementary budgetary support, debt relief, and private
sector financing, according to the proposal. 



The prime minister furthermore urged G20 nations to support the
World Health Organisation (WHO) and Africa Centres for Disease Control and
Prevention (CDC) in strengthening public health delivery and emergency
preparedness.



Cognisant of the fragility of the private sector, especially as
small- and medium-sized enterprises account for over 70% of the private sector
in Africa, the consortium stressed that liquidity relief should be extended in
particular to service and tourism sectors. 



African finance ministers requested support from the G20, EU, and
all Development Finance institutions to support a proposal aimed at the
refinancing, rescheduling, and implementation of guarantee schemes and
liquidity facilities for the private sector. 



In particular, African airline companies require preservation and
protection “given their significant contribution to the GDP of Africa”.
Ethiopian Airlines suspended flights to 80 destinations in light of the
pandemic. 



Demand for local flights, which are ongoing, dropped by at least
50% already. The airline estimates that it will lose at least $190m due to the
pandemic. 



The Ethiopian government has ordered the central bank to release
Etb15bn ($460m) to private banks as it ramped up its fight against the economic
spillover effects of the Covid-19 pandemic. The liquidity injection will enable
the banking sector to extend debt relief and additional loan facilities to
customers. 



This came in addition to instructions to avail foreign currency to
importers, with priority given to importers of essential goods or the
manufacturing of essential goods. 



In March, the World Bank granted a $500m grant and loan facility
(split evenly) to Ethiopia in support of its reform programme. 



The prime minister voiced his gratitude to “the generosity of the
Ethiopian people” as local stakeholders contributed generously to the National
Resource Mobilisation Committee initiative.



NKC African Economics’ preliminary GDP forecast suggests that
Ethiopia will be hit particularly hard by coronavirus-related disruptions. 



Absent comprehensive external support, a sharp slump in private
sector demand and investment momentum threatens an unprecedented plunge in
economic growth this year to 1.1% – down from a pre-virus forecast of 7.1%. 



Crucially, the pandemic threatens to disrupt progress made under
the reform agenda towards policy overhaul, broad-based privatisation of state
assets, financial liberalisation, and the launch of a domestic bourse. 



An uncomfortable reliance on grant relief amid strained domestic
fiscal capacity threatens to bloom into full-blown crisis in the absence of
comprehensive external financial support.

Lion_of_Judah,_Addis_Ababa,_Ethiopia

Op-Ed: Ethiopia – Abiy leads African appeal for relief actions

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IATA has estimated that the African Aviation Industry will lose more than $4 billion as a result of the COVID-19 pandemic – now with only Ethiopian Airlines posting profits in recent times on the continent, many of the industry players were in survival mode even before this pandemic. However, can they live to see past this black swan? Secretary General of the African Airlines Association (AFRAA), Abderahmane Berthé joins CNBC Africa for more.

How will Africa’s aviation industry survive COVID-19 crisis?

<figure class="wp-block-image size-large"><img decoding="async" src="https://www.cnbcafrica.com/wp-content/uploads/2017/06/Ethiopian_Airlines_Wikimedia-1024x683.jpg" alt="" class="wp-image-129387"/><figcaption>The accident killed all 157 people on board when the new Boeing plunged into farmland six minutes after taking off from the capital. It was the second accident involving the 737 MAX in five months and led to the plane being grounded worldwide. </figcaption></figure>



ADDIS ABABA (Reuters) &#8211; Families who lost loved ones aboard Ethiopian Airlines Flight 302 visited the crash site on Tuesday to mark the first anniversary of the tragedy, a day after interim results of a probe focused on faulty systems on the Boeing 737 MAX jet.



The accident killed all 157 people on board when the new Boeing plunged into farmland six minutes after taking off from the capital. It was the second accident involving the 737 MAX in five months and led to the plane being grounded worldwide.



People from 33 nations were aboard Flight 302, many of them working with the United Nations, and hundreds of relatives and friends from across the world travelled to Ethiopia for the memorial.



Families from countries including Canada, the United States, Ethiopia, Kenya, Uganda, Italy and France attended the ceremony at the crash site, about a three-hour drive from the capital, Addis Ababa.



The programme included a tree planting and the reading out of victims’ names, organisers said. Police set up a roadblock a kilometre from the site to prevent the public from attending.



At the United Nations offices in Addis Ababa, friends and families lit candles in front of wreaths in honour of loved ones and colleagues.



“We are traumatized all over again,” said Huguette Debets, who lost her husband Jackson Musoni, father of their three children.



“I want the world to never forget these horrific plane crashes…it could happen to any of us and it should never happen again.” 



In a separate event, employees of Ethiopian Airlines gathered at the pilots’ association, where pictures of the dead were lined by arrangements of white roses, the traditional colour of mourning in Ethiopia.



 A small string orchestra played as a slideshow displayed pictures of the dead in happier times.



Getachew Tessema, the father of the captain, said his family had been filled with pride when his son began working for the airline.



“He died at the tender age of 29. The only hope I have is to see him in the afterlife. Our wounds will never heal.”



The 737 MAX, Boeing’s best-selling aircraft, remains grounded. The plane maker has lost billions of dollars since the Ethiopian crash and an October 2018 accident involving Indonesia’s Lion Air, which killed all 189 people aboard.



 Boeing’s CEO was forced to step down and the company is facing hundreds of lawsuits from bereaved families.



Monday’s interim report from Ethiopia’s Aircraft Accident Investigation Bureau bolstered the findings of Ethiopia’s initial assessment, which linked the crash to the plane’s MCAS anti-stall software.



It identified no issues with the airline or the pilots’ handling of the plane. 



Inaccurate sensor readings activated the plane’s MCAS anti-stall system, pushing the nose of the aircraft lower as the pilots struggled to control it, the report said.



Reporting by Giulia Paravicini; additional reporting by Kumerra Gemechu in Addis Ababa; writing by Omar Mohammed and Katharine Houreld; editing by Jason Neely, David Goodman and Mike Collett-White

Memorial marks first anniversary of Ethiopian 737 MAX crash

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In a move to promote growth in the Aviation sector, Nigeria&#8217;s Ministry of Aviation picked a consortium including Egypt Air to set up an aviation leasing company.

Nigeria partners with Egypt Air

Nigeria partners with Egypt Air, Ethiopian Airlines to strengthen its aviation sector

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According to a senior government official, Ethiopian Airlines’ operating revenue jumped nearly 30 per cent in the year to July 31 2019, boosted by a surge in passenger numbers. Also, the airline revealed that it plans to build a $5 billion airport that could be able to handle 100 million passengers a year. Miretab Teklaye, Director of Integrated Marketing at Ethiopian Airlines joins CNBC Africa for more.

Ethiopian Airlines plans to build $5bn airport as part of its expansion drive

ADDIS ABABA (Reuters) &#8211; Ethiopian Airlines’ operating revenue jumped nearly 30% in the year to July 31, a senior government official said on Tuesday, helped by a surge in passenger numbers.



Operating revenue jumped by 28.6% year on year to 114.6 billion birr ($3.9 billion), said Wondafrash Assefa, head of communications at Ethiopia’s Public Enterprise Holding and Administration Agency (PEAA).



PEAA has a supervisory role over public enterprises including Ethiopian Airlines.



Wondafrash did not give a reason for the revenue leap, but the airline’s CEO Tewolde Gebremariam last month told state television that passenger numbers had risen by 14%.



In March, one of the airline’s Boeing planes crashed a few minutes after take-off from Addis Ababa en-route to Nairobi, killing all 157 people on board.



That crash and another involving Lion Air two weeks earlier led to the grounding of U.S. planemaker Boeing’s 737 MAX jets worldwide.



($1 = 29.2000 birr)



Writing by Elias Biryabarema; Editing by David Goodman

Ethiopian Airlines annual revenue jumps to 29%, what you need to know

NAIROBI (Reuters) &#8211; Ethiopian Airlines saw a big rise in its operating revenue in the year to the end of June, as a surge in passenger numbers helped to offset the impact of higher fuel costs, the carrier told Reuters on Friday.



Africa’s biggest airline said operating revenue rose 17 percent in dollar terms while passenger numbers were up 14 percent.



In March, one of the airline’s Boeing planes crashed a few minutes after take-off from Bole airport in Addis Ababa en-route to Nairobi, killing all 157 people on board.



“In one of the most challenging years, we managed to continue our fast, profitable and sustainable growth,” the airline told Reuters, sharing its preliminary results for the period.



The full set of results is expected in the next two weeks, the company said.



It flew 12.1 million passengers during the period, helping to cushion an increase in fuel costs of about 25 percent, the airline said.



Planes were three quarters full on average, a key performance measure for the industry.



Ethiopian said it offered 13% more flight seats per kilometre during the reporting period.



Reporting by Omar Mohamed; Writing by Duncan Miriri; Editing by Elaine Hardcastle

Ethiopian Airlines sees jump in operating revenue as passenger numbers rise

SEATTLE/CHICAGO (Reuters) &#8211; Boeing Co said on Wednesday it would give $100 million over multiple years to local governments and non-profit organizations to help families and communities affected by the deadly crashes of its 737 MAX planes in Indonesia and Ethiopia.



The move appears to be a step toward repairing the image of the world’s largest planemaker, which has been severely dented by the crash of an Ethiopian Airlines plane in March just five months after a similar crash of a Lion Air flight in Indonesia.



The two crashes killed a total of 346 people.



Boeing is the target of a U.S. Department of Justice criminal investigation into the development of the 737 MAX, regulatory probes and more than 100 lawsuits by victims’ families.



The multiyear payout is independent of the lawsuits and would have no impact on litigation, a Boeing spokesman said.



The $100 million, which is less than the list price of a 737 MAX 8, is meant to help with education and living expenses and to spur economic development in affected communities, Boeing said. It did not specify which authorities or organizations would receive the money.



Many of the passengers on board the Ethiopian Airlines flight were aid workers or involved with health, food, or environmental programs.



“If the money is spent on furthering the work of the people on that airplane it would be money well spent,” said Justin Green, a New York-based attorney representing several of the Ethiopia crash victims.



But he said the fund would not affect his clients’ courtroom strategy: “What families really want to know is why this happened. Could this have been avoided?”



Anton Sahadi, a representative of relatives of the Lion Air crash victims, said the families appreciated the $100 million fund but it did not mean they would stop lawsuits.



“We will continue to fight for our rights in the courts,” he said. “Boeing is doing this to build their image back.”



<h3 class="wp-block-heading">CHARM OFFENSIVE</h3>



After the Lion Air crash on Oct. 29 Boeing started developing a software&nbsp;<a href="https://www.reuters.com/article/us-ethiopia-airplane-southwest/boeing-sees-fix-for-latest-737-max-software-flaw-in-september-idUSKCN1TS26Q?enowpopup">here</a>&nbsp;fix on a stall-prevention system called MCAS believed to have played a role in that disaster, as well as in the Ethiopian crash.



The 737 MAX was grounded worldwide after the second crash and regulators must approve the fix and new pilot training before the jets can fly again.



But just last month, regulators identified a new problem that will delay commercial flight for the jets until October at the earliest.



Boeing is in settlement talks over the Lion Air litigation and has separately offered to negotiate with families of Ethiopian Airlines victims, but some families have said they are not ready to settle, exposing the planemaker to a lengthy court battle.



“The Boeing brand is worth far more than $100 million and the board and executive leadership understand that is what is at stake,” said William Klepper, a Columbia Business School professor.



Following an initial response that public relations experts criticized as stilted and lawyer-driven, Boeing has been on a charm offensive, with executives at the Paris Airshow last month repeatedly apologizing for the loss of life. Boeing Chief Executive Officer Dennis Muilenburg posts regular Twitter updates on efforts to safely return the 737 MAX to service and win back public confidence.



Robert Clifford, a Chicago-based attorney with several of the Ethiopian crash cases, suggested some of Boeing’s $100 million pledge could be spent assisting efforts to return the remains of victims to their families.



“These families are distraught about the effort to get back their loved ones,” Clifford said. “They want closure.”



Boeing has also offered to match any employee donations in support of the families and communities impacted by the accidents through December.



Reporting by Eric M. Johnson in Seattle and Tracy Rucinski in Chicago; additional reporting by Cindy Silviana in Jakarta and Tina Bellon in New York; editing by Bill Rigby and Grant McCool

Boeing makes $100 million pledge to help families and communities affected by deadly crashes of its 737 MAX planes in Ethiopia and Indonesia

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Ethiopian Airlines have announced a new direct flight link route from Johannesburg’s O.R Tambo International Airport to various African destinations. This follows a tumultuous few months of dealing with the Boeing crash and the recent issues that have risen from SAA. Abel Alemu, Regional Manager for Ethiopian Airlines Southern Africa joins CNBC Africa for more.

Ethiopian Airlines on SAA, new direct flight routes

NAIROBI (Reuters) &#8211; A Kenyan family has filed a lawsuit in Chicago against American aviation giant Boeing over a March 10 Ethiopian Airlines crash that killed 157 people, lawyers and family members said on Tuesday. 



Siblings of 29-year-old engineer George Kabau said they wanted to force the company to release documents and emails relating to its 737 MAX 8 model, which was grounded worldwide after two major plane crashed in Ethiopia and Indonesia.



A preliminary report released earlier this month indicated Ethiopian Airlines pilots wrestled with a computer system that repeatedly ordered the nose down because of faulty sensor data. The same system was a focus of the preliminary report into the October Lion Air crash in Indonesia, which killed 189 people.



Dozens of families are already suing Boeing over the Lion Air crash, and three lawsuits have already been lodged over the Ethiopian Airlines crash, by the families of two Americans, including consumer activist Ralph Nader’s great niece, and a Rwandan.



Lion Air’s co-founder on Monday lashed out at Boeing’s handling of the accidents.



Kabua’s sister, Esther Kabau-Wanyoike, choked up as she told a press conference that she wanted to use her brother’s death to improve aviation safety.



“He didn’t leave a child. My mum is devastated,” she said. “We can use his demise to ensure safer travel for all.”



U.S. lawyer Nomi Husain, who is also representing one of the American families, said the lawsuit was filed in Chicago late on Monday. The family was seeking to hold Boeing accountable, he said.



“We want to let the litigation process play out,” he said. “When you put profits over safety, you will be held accountable and you will pay a price.”



Boeing, which has previously declined to comment on individual lawsuits, and directed enquiries about the crash to investigating authorities, had no immediate comment on the latest case.



Kenya had the largest number of citizens on the flight from Addis Ababa to Nairobi. At least 32 Kenyans were on board, the airline said at the time, although that number may be larger because some of the travellers were dual nationals and the full manifest has still not been released.



Additional reporting by Tracy Rucinski in Chicago; Editing by Georgina Prodhan

Kenyan family who lost a loved one in Ethiopian Airlines crash files lawsuit against Boeing

By CNBC Africa and IATA&nbsp;



Africa is expected to retain its position as the weakest airline region in the world in 2019, as it has been over the past four years. These forecasts were made by the International Air Transport Association (IATA).



According to IATA, “African carriers&nbsp;are expected to report a $300 million net loss in 2019 (slightly improved from the$400 million net loss in 2018). The expected net loss per passenger is $3.51(-2.1% net margin). “Performance is improving, but only slowly. Losses are expected to be cut in 2019 as fuel prices decrease. The region benefits from higher-than-average yields and lower operating costs in some categories. However, few airlines int he region are able to achieve adequate load factors to generate profits.”



One exception to this story has been Ethiopian Airlines, the state owned carrier. Its net profit in the 2017/18 financial year rose almost 2 per cent to $233 million.



All regions (see break down below), except Africa, are expected to report profits in 2018 and 2019. Carriers in North America continue to lead on financial performance, accounting for nearly half of the industry’s total profits. Financial performance is expected to improve compared to 2018 in all regions except for Europe, where improvement has been delayed by the high degree of fuel hedging.



North American carriers&nbsp;are expected to deliver the strongest financial performance in 2019 with a $16.6 billion net profit (up from $14.7 billion in 2018). That is a 6.0% net margin and represents a net profit of $16.77 per passenger, which is a marked improvement from just six years earlier. Net margin is up from 2018 (5.7%) as low levels of fuel hedging allows lower prices to impact immediately. Profits are further buffered by high load factors and ancillary revenues.



European carriers&nbsp;are expected to report a $7.4 billion net profit in 2019(down slightly from $7.5 billion in 2018). The expected net profit per passenger of $6.40 (3.4% net margin) is roughly a third the net profit per passenger expected to be generated by North American carriers. Intense competition is keeping yields low and regulatory costs are high. The region has recovered from the terrorist attacks of 2016. But in 2018 it suffered additional costs of $2 billion due to a 61% increase in delay minutes caused by air traffic control deficiencies. Looking to 2019, high levels of hedging in the region will mean that the positive impact of lower oil prices will be delayed.



Asia-Pacific carriers&nbsp;are expected to report a $10.4 billion net profit in 2019 (up from $9.6 billion in 2018). The expected net profit per passenger is expected to be $6.15 (3.8% net margin). This is a region of diverse markets, some of which are seeing strong growth from new LCC entrants while others are very dependent on outbound cargo from key manufacturing centers. Cargo revenue growth has slowed from the strong performance of 2017 but remains positive for airlines in the region. Lower fuel costs, low levels of fuel hedging and strong regional economic growth are supporting profitability in 2019 in this region.&nbsp;



Middle Eastern carriers&nbsp;are expected to report an $800 million net profit in 2019 (up from a weaker $600 million in 2018). The expected net profit per passenger is $3.33 (1.2% net margin). The region has been challenged by the earlier impact of low oil revenues, conflict, competition from other‘super-connectors’ and setbacks to particular business models, leading to a sharp slowdown in capacity growth (after more than a decade of double-digit growth, passenger capacity growth was halved to 6.7% in 2017). The region reported 4.7% capacity growth in 2018 and is expected to slow to 4.1% in 2019,which together with restructuring is helping to generate a recovery.



Latin American carriers&nbsp;are expected to report a $700 million net profit in 2019 (up from $400 million in 2018). The expected net profit per passenger is$2.14 (1.6% net margin). Economic conditions in local markets are only recovering slowly, as Brazil’s economy emerges from recession, but Argentina faces renewed difficulties. The strength of the US dollar has added to airlines’ challenges in the region by raising the local currency cost of key US$-denominated inputs such as oil and aircraft, but significant restructuring and joint ventures are improving performance.&nbsp;



READ: <a href="http://cnbc.africa/insights/world-economic-forum/wef-davos-2018/2018/02/16/africas-aviation-industry-problem-future/">Africa’saviation industry has a problem, but this could be the future</a> 



Passenger Demand by Region



<table class="wp-block-table is-style-regular"><tbody><tr><td>
 Demand
 </td><td>
 Capacity
 </td></tr><tr><td>
 2018E
 </td><td>
 2019F
 </td><td>
 2018E
 </td><td>
 2019F
 </td></tr><tr><td>
 Global
 </td><td>
 6.5
 </td><td>
 6.0
 </td><td>
 6.0
 </td><td>
 5.8
 </td></tr><tr><td>
 North
 America
 </td><td>
 5.0
 </td><td>
 4.5
 </td><td>
 4.8
 </td><td>
 4.3
 </td></tr><tr><td>
 Europe
 </td><td>
 6.4
 </td><td>
 5.5
 </td><td>
 5.7
 </td><td>
 6.1
 </td></tr><tr><td>
 Asia
 Pacific
 </td><td>
 8.5
 </td><td>
 7.5
 </td><td>
 7.6
 </td><td>
 7.1
 </td></tr><tr><td>
 Middle
 East
 </td><td>
 4.6
 </td><td>
 5.5
 </td><td>
 4.7
 </td><td>
 4.1
 </td></tr><tr><td>
 Latin
 America
 </td><td>
 6.0
 </td><td>
 6.0
 </td><td>
 6.5
 </td><td>
 5.9
 </td></tr><tr><td>
 Africa
 </td><td>
 3.6
 </td><td>
 5.0
 </td><td>
 1.4
 </td><td>
 4.9
 </td></tr></tbody></table>

﻿Africa’s airline industry is the weakest in the world, this is how bad it is

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The 8th AABLAs or All Business Leaders Awards were announced at a glittering ceremony in Sandton last night. It was attended by business leaders and AABLA finalists from all over the continent, with finalists from East, West and Southern Africa competing for the ultimate honours. The annual AABLA Finals is the culmination of a year-long search for the most remarkable business talent in the continent. The winner in the Company of the Year category was Ethiopian Airlines. Abel Alemu, Regional Manager South Africa for Ethiopian Airlines joins CNBC Africa for more.

Ethiopian airlines win AABLA Company of the year award

ADDIS ABABA (Reuters) &#8211; Ethiopian Airlines will start flying to the Somali capital Mogadishu on Nov. 2 for the first time in four decades, the state-affiliated Fana Broadcasting reported on Tuesday.
“Our flights will quickly grow to multiple daily flights given the huge volume of traffic between the two sisterly countries and the significant traffic between Somalia and the rest of the world,” the airline’s CEO, Tewolde Gebremariam, was quoted as saying by Fana.
Writing by George Obulutsa; Editing by Matthew Mpoke Bigg

Ethiopian Airlines will resume flights to Mogadishu for the first time in four decades

LUSAKA (Reuters) &#8211; 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

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Africa’s airline industry is the weakest in the world, this is how bad it is