Ethiopian Airlines Group has suspended plans to set up a fleet of smaller jetliners in favour of larger planes which would serve the intended routes better.
Ethiopian Airlines chief executive officer Tewolde GebreMariam said:
“We have decided to suspend the evaluation of the 100-seater regional aircraft acquisition project since the market size of the selected regional routes is growing faster than we expected.”
The airline now plans to forgo Bombardier’s C series and Embraer SA’s E195 for the Boeing 737 jets in its current fleet while it assesses passenger trends.
Speaking at the Farnborough Airshow held at the UK this week, Tewolde said the airline might not order for the wide-body Airbus A350-1000 or the 777X, however, it could purchase Boeing’s 777s or the Dreamliner 787.
Privatisation Plans
According to the chief executive of the airline, the privatisation plans the government authorised last month could see more foreign investment in the eight business units than a stake sale.
Out of the total business units, some will be “very attractive” to foreign investors and could benefit from such an arrangement. The airline’s hotel, aerospace manufacturing, and airports units are already being negotiated up with companies such as Airbus, Bombardier, and Boeing.
The airline’s logistics unit, which has a venture with DHL brand, could become a joint holding giving the logistics company a 49 per cent stake.
A Bloomberg article states: “It is also possible that countries where [the airline] is working on international offshoots could take reciprocal stakes in the Addis Ababa-based carrier, according to Tewolde.”
International Offshoots
In May, the company announced plans to establish international offshoots by taking holdings in new operators in countries such as Guinea, Mozambique, Chad, and Zambia. The Ethiopian airline also plans to help manage existing carriers in DRC and Equatorial Guinea.
Tewolde said the airline is discussing with the chairman of Djibouti Airlines on the possible swapping of shares. Additionally, the CEO believes that holding a stake in Eritrean Airlines could be a “logical step” following the recommencement of direct flights between the two countries later this year.
The two countries have revived a bilateral air services deal which will allow Ethiopia to fly over Eritrea’s airspace and save on fuel costs.
Currently, Ethiopian Airlines has connects nearly 70 cities in the world and holds a stake in Malawi Airlines and Asky Airlines in Togo. The airline’s plans in dominating the African market aim to keep it at the top ahead of competitors such as Kenya Airways and South African Airways.
