Vows to support cash-strapped African carriers
The biggest African airlines, Ethiopian airlines group is going to report around one billion dollar in revenue loss in the first six months of 2020.
According to sources the airline is losing about 1 billion dollar from ticket sales starting from January up to June after the global pandemic brought passenger travel to almost zero.
Recently Ahmed Shide, State Minister of Finance announced that, the government will support the airline and also international institutions are also egger to support the airline including World Bank, International Financial Corporation and African Development Bank. “Additional to the support of the financial institutions, the government will also give support based on the economic response plan to help the airline through these difficult times,” Ahmed said.
Recently the international air transport association (IATA) forecasts in 2020 African airline industry will see 51 percent airline passenger revenue drops compared to 2019 because of the Covid 19.
According to the revised report launched by the association African airlines will lose six billion dollars in revenue compared to the last year as if international travel restrictions are assumed to be reduced more slowly, with only 50% and continue by the fourth quarter of the year. And since Ethiopian is the largest airline in the continent it will have the lion’s share of that loss.
Ethiopian Airlines was Africa’s busiest carrier, making more than 350 flights per day to more than 120 destinations.
To survive from the damage the air line is doing new stream of income, including the cargo and MRO business and recently the airline has converted its Boeing passenger aircrafts to cargo.
In related development Ethiopian Airlines is prepared to come to the rescue of stricken carriers around Africa, even as the continent’s biggest airline deals with its own mounting losses and grounded planes due to the Covid-19 pandemic.
As per Bloomberg, the airline is in talks with the government of Mauritius about the revival of Air Mauritius, which was put into administration last month, Ethiopian CEO Tewolde GebreMariam said. And while there are no negotiations currently taking place with South Africa, Tewolde would be open to a conversation about that country’s bankrupt national airline.
Air Mauritius has joined the insolvency league in April as the company’s board of directors announced that the carrier would be put into voluntary administration. The airline which completed 50 years in 2017, hosted the African Airlines Association’s (AFRAA) 8th Aviation Stakeholder’s Convention and 51st AFRAA annual general assembly (AGA) & summit in 2019.
“The Mauritian government is thinking of restarting that business with Ethiopian Airlines,” Tewolde said. “We are at the initial point of the discussion to see what kind of partnership or joint venture it will be.”
The global airline industry has been thrown into a historic crisis by the coronavirus outbreak, which has led to the grounding of almost all aircraft as governments close borders.
South African Airways (SAA) is out of cash and in the middle of a tug of war between government, unions, and administrators over its future.
Ethiopian last held discussions with South Africa’s government about SAA in early January, the CEO said, and the carrier would be willing to take part in a proposed revival of the national airline.