Ethiopian Airlines with Two African Airlines To Form New Carrier

Ethiopian Airlines
The Star Alliance acceptance yesterday of Ethiopian Airlines is an integral part of Star’s expansion across the continent

By Darren Shannon, Aviation Week

Three of Africa’s leading airlines including Ethiopian Airlines are in talks to establish joint ventures, and could launch their first collaboration in Central Africa early next year.

Details are still being negotiated, although the CEOs of Egyptair, Ethiopian Airlines and South African Airlines tell The DAILY they expect a formal announcement in the coming months. Egyptair Chairman and CEO Hussein Massoud also says the first venture should launch early next year.

All three executives were in Addis Ababa to celebrate Star Alliance’s formal acceptance of Ethiopian Airlines application to join the airline group. The three said they would discuss their proposed ventures after the event.

Central and West Africa are the group’s primary concern, and the first venture will be located in one of the six central nations—Cameroon, Central African Republic, Chad, the Democratic Republic of Congo, Equatorial Guinea and Gabon—because the region has a more advanced aviation sector, says SAA CEO Siza Mzimela.

Mzimela adds that this company will be a new airline, although she confirms that future ventures could include investment in existing airlines.

She also confirms that any new entity will focus on intra-African traffic. “There is little feed or de-feed in the region,” she notes. None, for now, will adopt a low-cost model, she adds.

Various business models are being considered, and while Ethiopian CEO Girma Wake noted the potential for direct investment akin to his airline’s involvement with Togo startup ASKY, Mzimela notes that their participation could include non-monetary support.

Egyptair’s Massoud also confirmed the airlines could provide aircraft from their own fleets, although he stressed that many options were still being discussed. “Africa is too big for five or six carriers,” says Wake. “The three of us are working together, so we can create a critical mass.”

The Star Alliance acceptance yesterday of Ethiopian Airlines is an “integral part” of Star’s expansion across the continent, which already includes Egyptair’s and South African Airways’ networks. “Demand will mainly stem from economic growth made possible by increasing political stability and creating a better business climate,” said Star CEO Jaan Albrecht. “Moreover, we will in future have three main hubs in Africa—Addis Ababa, Cairo and Johannesburg.”

Star’s CEO also noted an area in Central Africa that is unserved by Star, which he expects to be resolved by Ethiopian’s addition. This proposed expansion is in addition to the 24 new destinations Ethiopian Airlines brings to Star’s network.

This acceptance begins a 12- to 18-month process to integrate the airline into the alliance. Apart from Ethiopian Airlines, Star is also integrating Air India into the group, although this has been hindered by information technology issues.

Ethiopian Airlines integration will be aided by Lufthansa, which is mentoring the African carrier’s application.

Ethiopian Airlines

“We are happy and honored to be invited to the big family of airlines,” said Ethiopian Airlines CEO Girma Wake during the news conference. “Our long experience in the Africa market, coupled with our strategic hub in Addis Ababa, and the recently created Lome hub [in Togo in partnership with ASKY] will allow Star Alliance members to access many new markets in Africa.”

Ethiopian Airlines is in talks with Egyptair and SAA to establish new airlines for some of these new markets, Wake told reporters during a Sept. 28 news conference at the airline’s headquarters.
Ethiopian Airlines acceptance comes just two days before Star founding member United Airlines formally merges with Continental Airlines, which joined the alliance late last year.