Ethiopian Airlines flies past its target

ETHIOPIAN Airlines is powering ahead with a plan to expand its fleet and route network after exceeding its profit target for the 2014/15 year, its chief executive said.

The state-owned carrier is ranked the largest in Africa by revenue and profit by the International Air Transport Association, the global industry body.

Chief executive Tewolde Gebremariam said the firm had revenue of 49.4 billion birr (R30.23bn) in its fiscal year ended July 7, exceeding a target of 43bn birr. It attributed the growth to a rise in passenger numbers and to expansion of maintenance, catering and aviation training services.

Passenger numbers for the period were not immediately available. Ethiopian Airlines flew six million passengers in the prior year, up from 5.22 million in 2012/13.

Net profit for the year ended last month rose to 3.5bn birr for the same period, well above the expected 2.9bn birr.

Ethiopian Airlines plans to increase revenue to $10bn (R129bn) by 2025 by nearly doubling its fleet of 77 aircraft and opening new routes. It currently has 77 planes, including 13 787-8 Dreamliners by Boeing. It ordered six more Dreamliners in June.

Ongoing impasse

It has 50 planes on order altogether, including 14 A350s by Airbus, and expects to increase its fleet of Dreamliners to 30 in 10 years’ time, Tewolde added.

He had a word of caution about the ongoing impasse in the US over its Export-Import Bank, which lends money to US exporters and their foreign customers like Ethiopian Airlines. The 81-year-old Exim Bank saw its charter lapse last month after conservatives in the US Congress cast it as a promoter of “crony capitalism” for multinationals such as Boeing and General Electric.

“It is an essential financial instrument for us. We want the US Exim Bank to reopen and that was our main point of discussion with President Obama,” Tewolde said, referring to the US leader’s visit in July. “We want to continue, because that is our main, and perhaps only, means of financing our airplanes and financing our growth in the future.”

The airline has targeted the growing trade ties between Asia and Africa in recent years, as well as that with Brazil by inaugurating flights to Rio de Janeiro.

It also launched flights to Los Angeles and Toronto this year.

Tewolde said Ethiopian Airplanes was planning Jakarta, Ho Chi Minh City and the Chinese cities of Chengdu and Shenzhen as its next Asian destinations, as well as adding Oslo in Europe and New York and Chicago in the US. – Reuters