Ethiopian Airlines ready to be savior to fellow African carriers

by Bloomberg May 06, 2020

Ethiopian Airlines Group is prepared to come to the rescue of stricken carriers around Africa, even as the continent’s biggest airline deals with its own mounting losses and grounded planes due to the Covid-19 pandemic.

Talks are underway with the government of Mauritius about the revival of the island nation’s state carrier, which was put into administration last month, Ethiopian Chief Executive Officer Tewolde GebreMariam said in an interview on Tuesday. And while there are no negotiations currently taking place with South Africa, the CEO would be open to a conversation about that country’s bankrupt national airline, he said.

“The Mauritian government is thinking of restarting that business with Ethiopian Airlines,” Tewolde said. “We are at the initial point of the discussion to see what kind of partnership or joint venture it will be.”

The global airline industry has been thrown into an historic crisis by the coronavirus outbreak, which has led to the grounding of almost all aircraft as governments close borders. African carriers haven’t escaped the bloodbath, with Ethiopian set to lose almost $1 billion in ticket sales over its fiscal year to end June, according to the CEO.

South African Airways is out of cash and in the middle of a tug of war between government, unions and administrators over its future. Kenya Airways, part of a regional ‘big three’ with Ethiopian and SAA, has requested state assistance to see it through to a time when the airline can fly again.

SAA Revival

Ethiopian last held discussions with South Africa’s government about SAA in early January, the CEO said, and the carrier would be willing to take part in a proposed revival of the national airline. SAA’s administrators have given labor groups until Friday to agree to severance packages for the near 5,000-strong workforce, but Public Enterprise Minister Pravin Gordhan has said he’s still exploring funding options that may involve private entities.

“We think we can approach them and restart the discussion with the new airline,” Tewolde said.