Ethiopian moves to broaden foothold in Africa

Ethiopian Airlines
Ethiopian Airlines is evaluating launching additional airlines in southern or northern Africa.

By Kurt Hofman, Air Transport World (ATW): Ethiopian Airlines is seeking to expand its African presence by creating airline startups across the continent.

It launched Lome-based ASKY Airlines in January (ATWOnline, January 21 [2]). CEO Girma Wake previously told ATWOnline that Ethiopian has a 25% stake in ASKY, which has a diverse ownership spread among individuals and institutions in 11 African countries. The carrier operates to 11 destinations and will take delivery of its third 737NG during the summer. “ASKY has become profitable already,” Wake told ATWOnline this week on the sidelines of the IATA AGM in Berlin.

He said ET is evaluating launching additional airlines in southern or northern Africa. “But first we want to [solidify] ASKY,” he explained. He did not rule out investing in existing African carriers. “We are talking to [some airlines],” he revealed. A further possibility could be to join forces with another major African airline to launch a startup, he said. He also reiterated that ET would like to join Star Alliance.

ET operates 26 jet aircraft (including a freighter fleet of two 747Fs, two MD-11Fs and two 757-200Fs) and nine turboprops. “We take delivery of our first 777-200LR this autumn,” Wake said. A total of five 777-200LRs will arrive through July 2011. It will take delivery of three 737-800s during the remainder of this year. He added that delivery of the carrier’s first 787 is confirmed “for July 2011.” It has 10 787s on order.

ET operates an extensive network, including 14 weekly flights to both China and India. Wake said it is considering new Asian destinations such as Malaysia and South Korea. It also is evaluating additional US routes including New York JFK, Atlanta or even a West Coast destination. It currently serves Washington Dulles.

He noted that ET faces stiff competition from non-African airlines within Africa. “Carriers like Emirates and Qatar are fighting like crazy across the continent,” he said. “But so far there is business for everyone.”

Wake expects ET to grow passenger traffic at the rate of 20% annually. Currently, 60%-70% of its passengers transfer through its Addis Ababa hub. It expects to transport around 3 million passengers this year, up from 2.8 million last year. Cargo remains an important part of its business, generating 18% of total revenue. He said it is considering operating 777 freighters “in the future.”