In a year marred by challenges including a plane crash in March that killed 157 people, Ethiopian Airlines Group recorded an increase in profit after flying more passengers.
Profit at Africa’s largest airline jumped 18% in the year through June, Chief Executive Officer Tewolde Gebremariam said in a televised speech on Tuesday, without giving figures. The airline reported profit of $233 million in 2017-18, according to Fana Broadcasting Corp.
The most profitable airline on the continent overcame rising fuel costs and a slowdown of the global economy with a 14% increase in the number of passengers, Gebremariam said in the Ethiopian capital, Addis Ababa.
“It was a challenging year, but you don’t test our strength only during the good times but in challenging times too,” he said.
The trade war between the US and China is a concern as the two countries are the airline’s top markets.
“Though we haven’t seen a reduction in passenger numbers, there has been a reduction in cargo, this has us worried,” Gebremariam said.
Ethiopian expects to receive 25 more planes this year, bringing its fleet to 144 jets, Gebremariam said. The new aircraft will aid in adding 11 routes, expanding the airlines destinations to 123 in the new year.
A crash on March 10 led to the grounding of all Boeing 737 Max jets, which were part of Ethiopian’s growth strategy. That has complicated purchasing decisions for new craft, he said.
Ethiopian is laying down a new expansion strategy for the next 15 years after achieving its so-called Vision 2025 seven years ahead of time. It’s already bagged joint ventures in Malawi, Chad and Zambia, and has a subsidiary in Mozambique. The carrier is also in talks to start airlines in Ghana and Nigeria.
Expansion plans include a new airport in Ethiopia, whose construction starts this year, and hotel capacity of 1,000 beds, he said.
“Bole Airport, for topography reasons, cannot grow,” Gebremariam said of the facility in the capital, Addis Ababa. “It is surrounded by the city, so we need a new airport. This project should take between four to six years.”
© 2019 Bloomberg L.P.
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