Already a largely uncontested international force among African carriers pre-pandemic, Ethiopian Airlines under Tewolde Gebremariam is positioned to further increase its footprint on the continent once the threat of the pandemic subsides.
Speaking in February, Gebremariam notes that combined with Ethiopian’s uniquely strong financial performance in the region over the past decade, its “quick decision” to focus more capacity on cargo operations in the early days of the crisis has paid off.
“We have a very strong cash flow,” he states. “We are still managing our cash flow within internal resources, without bailout money and without any borrowing for liquidity purposes, and without any lay-offs or salary reductions.”
Therefore, while the return of more passenger operations will be the catalyst for a full recovery, the state-owned carrier is “at least in a better position than the rest of our peers” in Africa.
Ethiopian’s decision to convert more aircraft for freight operations – by removing some or all of the seats from passenger cabins – came as it recognised two important factors in the early days of the crisis, Gebremariam explains: less bellyhold capacity in the market with passenger aircraft out of action and the increased demand for the transport of “PPE and other medical equipment” related to Covid-19.
Favourable fuel prices have also been important.
“There was a significant [cargo] capacity increase at the right time,” he recalls. “The yield was very good, demand was very high, so we took advantage of that opportunity.
“We’ve shown agility, speed of decision-making and resilience, and that has helped us.”
Those 25 “make-shift” cargo aircraft are operating alongside the Addis Ababa-based carrier’s 10 Boeing 777-200Fs and two 737-800SFs.
The temporary conversions have buoyed the carrier’s performance at a time when, in common with international long-haul operators around the world, passenger demand for its services is severely depressed.
Amid the demand for cargo operations, Ethiopian’s ’cash-positive’ situation contrasts sharply to that of the region’s wider airline sector, Gebremariam states.
“The aviation industry in Africa was not in a good shape.” he says. “This is an industry that has been losing money… for six, seven years in a row.”
Africa’s airline industry has therefore been “severely damaged” by the pandemic, Gebremariam suggests.
The situation has been exacerbated by a number of factors, according to Gebremariam, including border controls, little state support for operators, and the lack of capital markets in Africa.
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Tewolde Gebremariam – Ethiopian Airlines