Ethiopian Airlines May Rescue And Create New Airlines All Over Africa
Africa’s largest carrier Ethiopian Airlines has publicly stated it is ready to rescue other struggling airlines and to…
Africa’s largest carrier Ethiopian Airlines has publicly stated it is ready to rescue other struggling airlines and to restart talks on the revival of South African Airways. CEO Tewolde GebreMariam wants to rescue Air Mauritius, even while Ethiopian tackles its own struggles as a result of the coronavirus crisis.
A savior of African carriers
African airline behemoth, Ethiopian Airlines, is reported to be aiming for hero status in the continent’s aviation industry. The Group, which is by far the largest in Africa, could come to the rescue of struggling airlines amid the chaos caused by COVID-19.
A report by Bloomberg today suggests that talks are already underway with the government of Mauritius regarding the revival of its flag-carrying airline. Air Mauritius entered administration last month, another casualty of the global downturn in travel demand.
Right now, no conversations are being held with the government of South Africa, despite the difficulties the aviation industry is facing there. However, Bloomberg reports that the CEO of Ethiopian, Tewolde GebreMariam, would be open to a dialogue regarding its bankrupt national carrier. Bloomberg quotes the CEO as saying,
“The Mauritian government is thinking of restarting that business with Ethiopian Airlines. We are at the initial point of the discussion to see what kind of partnership or joint venture it will be.”
No mention was made of Kenya Airways, one of the ‘big three’ carriers in the region. However, the airline has made no secret of the impact the COVID-19 disruption has had on its business. How We Made It Africa reports that some staff have taken up to 80% pay cuts, and the carrier is becoming increasingly reliant on cargo operations to keep its head above water.
Revival of SAA
South African Airways has been struggling financially for some time and is now in the midst of a tussle between administrators, the government and workers unions over its future direction. While it has been confirmed that a new national airline will be formed from the ashes of the bankrupt carrier, much still needs to be decided on how that will actually look.
Ethiopian Airlines previously held discussions with the South African government regarding its national carrier back in January. Now, GebreMariam says it would be willing to participate in the revival of the airline, telling Bloomberg,
“We think we can approach them and restart the discussion with the new airline.”
However, despite Ethiopian’s good intentions, it has not escaped COVID-19 unscathed. Amid reports of workers being furloughed, the carrier’s extensive network of 125 destinations has been reduced to just 30 and has cost it in excess of half a billion dollars. While the airline believes it can survive until at least July on its cargo operations only, a prolonged travel downturn could jeopardize its future financial health.
Do you think Ethiopian should step in and help other struggling African airlines, or is this just a ploy to acquire smaller carriers on its path to dominance in the region? Let us know your thoughts in the comments.