Wednesday, July 24, 2024
BusinessEthiopian overtures multinational African airline

Ethiopian overtures multinational African airline

Ethiopian Airlines has proposed the establishment of a new multinational Pan African airline in south central Africa.

Ethiopian Airlines Group CEO Tewolde Gebremariam told The Reporter that his airline is contemplating the establishment of a new multinational airline by seven countries in East, Central and Southern Africa. Tewolde said his airline has proposed to the governments of Zambia, Zimbabwe, Uganda, Rwanda, Namibia, DRC Congo, and Botswana to establish a new multinational Pan African airline that will be based in Central or Southern Africa and serve the whole region. Tewolde said that the planned airline would be created by the great lakes countries with the help of Ethiopian Airlines and would fly to different African nations which are currently under served. The planned airline would provide domestic, regional and international flight services.      

According to Tewolde, African carriers are facing a stiff competition coming from non African carriers. Particularly, the giant gulf carriers are dominating African skies. The three Middle Eastern giants-Emirates, Qatar Airways and Etihad Airways- have put Africa in the center of their growth strategy. Some European carriers and Turkish airlines also have significant market share in Africa. Turkish Airlines fly to more than 40 destinations in Africa. Today, 80 percent of African passenger traffic is carried by non African carriers.

“African carriers are being driven out of the market,” Tewolde said. “Some ten years ago African carriers had forty percent market share on the intra African market. This has dwindled to 20 percent. Unless we wake up and do something today ten years from now there will be no home grown African airline. It will be the end of the African airline industry,” Tewolde told The Reporter.

According to Tewolde, the airline industry is volume driven. He said an airline needs to have the critical mass to survive. “Size matters. So are gone the days that every African country needs to have its own small national flag carrier. This mind set has to change. You cannot survive the mounting tremendous competition with small airlines operating a couple of aircraft. You need to have the minimum number of fleet that justifies the economies of scale.”

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Tewolde said the East, Central and Southern African countries have to come together, put their resources together and establish a multinational airline that serves the whole region.  “That is how African airlines could withstand the tremendous competition coming from non African airlines. Unless we collaborate, the giant carriers would swallow us for lunch,” he said.            

Tewolde said Ethiopian Airlines, which is the largest and most profitable airline in Africa at the moment is ready and willing to provide assistance to the establishment of the planned multinational airline. “We can provide technical assistance. We have the knowhow and expertise.”

Tewolde said Ethiopian has expressed its intention to the great lakes countries and got positive response. “But this needs further discussions. And it does not mean that this view is shared by every country.”    

Ethiopian Airlines has invested in ASKY Airlines in West Africa and in Malawi Airlines in Southern Africa. It is also in the process of forming a strategic partnership with RwandAir.

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