Home » How Ethiopian Airways is Countering the Downturn

How Ethiopian Airways is Countering the Downturn

by Ajay Prakash

Ethiopian Airlines, the national flag carrier of Ethiopia, has come a long way since it was established in 1945. With a fleet of 116 aircraft, the airline today serves 129 destinations in 75 countries, add to those another 40 cargo destinations. The airline is headquartered at Bole International Airport, Addis Ababa, which is now a busy transit hub for the airline.

Ethiopian – Adding Smiles To Miles © VoyagesAfriq

Growing during the pandemic period

The airline has been consistently growing over the last decade by adding seat capacity and thereby increasing revenues. A decade ago, Ethiopian was ranked at number four in Africa. By 2015 the airline had claimed the No.1 spot and became Africa’s largest carrier.

It is also refreshing to note that the airline expects to remain positive in the financial year ending July 31 2020.

CEO Tewolde Gebremariam said that – “We may not be as profitable as we expected, but we registered some profit. The first half of the year was good, and the cargo business has also done very well.” – Source Bloomberg

The Crisis Response That Worked

Ethiopian had quickly responded to the disruption in services due to the outbreak of the pandemic. The airline did not seek any special government bailout package. Instead, they adopted a multi-prong strategy.

The airline kept operating passenger flights to countries where no travel restrictions were imposed. When the entire world suspended flights to China, Ethiopian decided to keep flying to all Chinese destinations. They also were backed by the Chinese government for their support.

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The passenger freighter carried 23 tonnes in its first flight even using its cabin space – © LogupdateAfrica.com

As vast amounts of relief material were to be imported from China, the airline converted 15 passenger planes to cargo freighters.  This move kept the revenues coming in, and it is speculated that the airlines earned up to 40% of its annual revenue from freight operations. This was enough to keep making timely payments, including staff salaries. The airline also did not layoff any of its workforces.

Ethiopian carried out numerous repatriation flights from the US to bring home thousands of its stranded citizens. Till June end, the carrier was still flying about 40 charter repatriations a week, while commercial flights remained mostly grounded.

Excess capacity was temporarily leased out to other operators who required aircraft for cargo operations. In the process, the airline discovered the profitability of cargo operations and thereby kept adding new cargo destinations, even during the pandemic period.

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As the world limps back towards normalcy, Ethiopian is starting scheduled services once again. Last week the airlines announced that it had commenced operations to almost 40 destinations, with more to be added as the travel restrictions are eased.

Ethiopian is a reason to cheer. Let us know how you feel about the strategy adopted to counter the downturn. Do write to us in the comments!

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