ET earns USD 494 million profit in 2020/21
Ethiopian Airlines (ET) edges closer to acquire a 45 percent stake in Democratic Republic Congo’s national carrier, Air Congo. ET will overtake the management contract for the airline, apart from acquiring shares.
While 55 percent of the stake will remain in the hands of the government of DRC, the remaining will be under the ownership of Ethiopian. The new airlines is the second of its kind for the government of Congo, which already has a national carrier called Congo Airways, a company that is struggling to remain afloat.
“We will sign agreement within two to three months,” said Girma Wake, board chairman of Ethiopian airlines, during a presentation on June 23, 2022. “Basically we do not co-invest with governments in those countries, but with institutions like banks. The bank has money, ET has the skill.”
The deal will increase the number of ET’s stakes in foreign airlines to four, since it started establishing subsidiary airlines twelve years ago. So far, ET has secured a 49 percent share in Malawi airlines, 45 percent in Zambian airlines, and 27 percent in Togo (Lome) airlines (ASKY). These also include management contracts for the airlines.
“Our stakes in African airlines so far is profitable. In most cases, we do not directly inject cash into the airlines we acquire abroad. Rather, we give these airlines and other supplies in kind. We also train their pilots and manpower at our state of the art facilities with preferential prices,” added Girma.
Ethiopian Airlines is also responsible for saving a number of African airlines from the verge of bankruptcy.
Ethiopian airlines maintained its top performance during the COVID-19 pandemic. The airlines generated USD 3.4 billion in revenue and USD 494 million in profits in 2020/21.
It repurposed a number of its aircraft into cargo, as travel dwindled during the pandemic. Cargo destination increased to 56 countries around the world.
An institution that started with USD 1.5 million in 1945, ET now has 135 modern aircrafts. Of the aircrafts it operates, 48 percent are leased, while the rest is owned. It also owns 22 airports locally, of which four are international.
“Ethiopian Airlines is highly benefiting by acquiring shares in other countries airlines. It is a good strategy to maximize destinations as it cannot fly to every city in Africa,” said a veteran aviator.
“A major success factor of the airlines is its management autonomy. No company in Ethiopia has the type of management autonomy ET has,” the expert added.
With its close to 15,500 employees, the airline prepares 100,000 meals daily.
The Ethiopian airlines group is expected to finalize the expansion of its hotel business in Addis Ababa. Skylight Hotel will add 637 rooms by next year, in addition to the 373 rooms it is operating in the first phase.