Zambia, Ethiopia Airlines Sign $30m Contract on National Carrier

The Zambian government has signed a $30 million contractual agreement with most profitable carrier in Africa, Ethiopia Airlines for the take-off of a new national carrier that is scheduled to commence in October 2018.

This was disclosed by the Zambian Minister of Transport and Communications, Mr. Brian Mushimba made this known and explained that President Edgar Lungu’s cabinet had formally approved the Zambia Airways project recently.

He hinted that the carrier would be a joint-venture with Ethiopian Airlines and would be allocated $30 million from the 2018 national budget.

Earlier in 2017, Ethiopian Airlines’ Managing Director, Mr. Tewolde Gebremariam said Zambia Airways would likely operate a combination of Dash 8-400 and B737NextGen aircraft.

Zambia is the second country in the Southern African Development Community (SADC) trade bloc to have partnered Ethiopian Airlines, the first being Malawi through its already active Malawian Airlines initiative. There, government holds a 51 per cent stake with Ethiopian controlling a 49 per cent stake.

The Head of Malawi’s Public Private Partnership Commission (PPPC), Jimmy Lipunga, had told journalists in September that despite initial promise on its launch four years ago, Malawian Airlines had yet to reach breakeven.

“The business model that was floated during the tender indicated that the airline would be making profits by the second year, but the reality on the ground has been different as the airline has struggled to gain the market share that is needed to make profits,” he said.

Under the PPPC’s original plan, government would have offered up a 20 per cent stake in the carrier to Malawian citizens once it turned profitable. That way, effective ownership of the airline would have remained in Malawian hands despite government’s retreat.