Ethiopian Airlines targets strong growth with multi-hub strategy

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Ethiopian Airlines says discussions to set up a central African hub is "progressing very well" and that it could launch an airline based in the Democratic Republic of Congo (DRC) as soon as within a year.

Speaking to Flightglobal Pro in a recent interview in Singapore, chief executive Tewolde Gebremariam says the carrier is working towards setting up an airline in the DRC, either with the local government or private investors.

“Discussions started about six months ago and is progressing very well at this stage. In about a year we will be able to launch this,” says Gebremariam. “The airline will serve as a central hub and feed for the main carrier.”

He adds that Malawi Airlines will meanwhile start operations in January 2014, with one Boeing 737 and a Bombardier Dash 8 Q400.

In July, Ethiopian took a 49% stake in the new Malawian flag carrier, intended to succeed Air Malawi. The Malawian government and private investors will hold the other 51% stake in the southern African airline.

The Addis Ababa-based Ethiopian also has a subsidiary in west African carrier ASKY. The five-year-old carrier has expanded to 22 destinations and a fleet of eight aircraft, providing Ethiopian with a base in the west.

Gebremariam says Ethiopian’s revenue has grown by more than seven times in the past seven years. The carrier recorded a revenue of Ethiopian birr (ETB) 34.8 billion ($1.8 billion) in the 2012/13 financial year and aims to grow to an annual revenue of $10 billion by 2025, as it expands to a fleet of more than 120 aircraft.

“The growth is quite significant in Africa and it’s a good opportunity for us. There will continue to be huge traffic growth driven by huge economic development,” he adds.

Gebremariam, however, also called for more collaboration among African carriers to strengthen their position against foreign carriers.

“Intercontinental traffic between Africa and the rest of the world, 80% of which is carried by non-African carriers. We need to collaborate to make sure we have a fair market share of at least 50%,” he says.