260 million reasons to smile
The fastest growing airline in Africa, Ethiopian Airlines, has earned an operating profit of USD 260 million in the 2018-2019 fiscal year that ended in June 2019.
The national carrier generated USD four billion operating revenue and made a net profit of USD 189 million. Passenger number grew by 17 percent to 12.1 million, a record high number of passengers. Ethiopian Cargo transported 432,000 tons of cargo in the year under review.
Ethiopian Airlines Group Chief Executive Officer Tewolde Gebremariam told The Reporter that the 2018-2019 fiscal year was the most challenging year in the history of the 73-year-old airline. “As you know the 2018-2019 was a very challenging year. In fact we believe that it was the toughest year in our history,” Tewolde said.
According to Tewolde, the tragic Boeing B737-8 MAX plane accident that claimed 157 lives in March was the biggest challenge the airline faced. “We lost our dear colleagues and valued customers and we still remember them in our daily lives. Managing the accident crisis was a challenge,” he said.
In the aftermath of the tragic accident, Ethiopian was first airline that grounded its MAX fleet. The carrier placed repeated order for 30 B737-MAX jetliner and took delivery of five and 25 more on its order book when the accident occurred.
The airline lost one B737-8 MAX aircraft in the accident and grounded the remaining four. Tewolde said the accident crisis was professionally handled adding that the vote of confidence the airline got from the traveling public was encouraging. “We also have issues with the 787 aircraft powered by Rolls Royce engines. Although Rolls Royce is compensating us we are facing shortage of aircraft,” Tewolde said.
The global economic slow down triggered by the US China trade war, African countries debt stress, sudden surge in fuel price are some of the major challenges the airline faced. The price of jet fuel has jumped by 21 percent and this has increased our operating cost. “The decline in Ethiopia’s export has affected us but we moved our cargo planes to Europe and China routes,” he said.
Ethiopian has been unable to repatriate its fund from many African countries. According to the CEO, the airline has faced challenges in repatriating its funds from countries like Angola, Zimbabwe, Congo Brazzaville, Central African Republic, Sudan and Eritrea. “We have blocked funds in some African countries and we are losing money due to the currency fluctuations. We had discussions with the respective governments but we did not find any solution so far,” he said.
In a related news, the management of Ethiopian Airlines has presented a 15-year growth strategy that dubbed Vision 2035 to the Board of Directors chaired by Abadulla Gemeda, former speaker of the House of People’s Representatives. Tewolde said the growth strategy would scale up the growth of the airline. “It has not yet been approved by the Board so I better not go into details,” he said.
Vision 2035 would make Ethiopian a USD 25 billion company with more than 200 aircraft by 2035. Ethiopian currently operates a young fleet of 121 aircraft with average age of five years to 125 destinations.