Ethiopian Airlines which doubles as Africa’s biggest airline, has since January lost more than a hooping half-a-billion dollars because of the coronavirus pandemic which has hit way hard the whole world businesses. However, regardless of the financial loss, the company’s CEO reports the company is in high belief it can carry on regardless especially in part by turning focus to improving its cargo business.
Last week, the Ethiopian Airlines CEO Tewolde Gebremariam told a team of reporters that the airline had lost about $550 million between the months of January and April alone. This was caused by the coronavirus pandemic which saw passenger traffic to a near-complete halt in preceding months and later to a complete halt by April.
Tewolde affirmedthe fact that the airline is facing a severe financial crisis and also highlighted that three airline employees had earlier tested positive for COVID-19 though currently in stable condition. Regardlys of the company’s wanting financial muscle, Tweolde is confident that Ethiopian Airlines will kick back strongly and ride out the current inevitable storm.
One of the fight back avenues he highlighted was one where the company is mitigating the financial set back by finding new streams of income.
“We are now focusing on cargo. The cargo business is relatively doing well because urgently required medical supplies are needed all over the world from east to west, west to east, north, south and so on. We are also trying to convert some of our passenger aircraft to cargo,” he commented.
Tewolde also mentioned that the company has saved money by cutting back deeply on daily flights and suspending talks with Boeing and Airbus to replace older aircraft in its fleet.
However, Airline industry experts have stressed that some of Africa’s air carriers are likely to go out of business during the ongoing crisis and could also face straining times after the crisis. According to John Grant, a senior analyst at the aviation data firm OAG, says that Ethiopian Airlines was better positioned “than any other African carrier.”
“Their management team has done a better job. They have a more diverse network. They are using modern aircraft. They’ve got a good hub in Addis that feeds Europe to South Africa. It feeds West Africa to Asia and the Middle East. It feeds South Africa up to the United States and other points. Of all the African carriers, they are probably regarded and perceived as being the best in class,” he said.
He also conferred the company’s move into the cargo market.
“Cargo capacity at the moment is very, very scare around the world. And by virtue of having both dedicated aircraft and swapping in some passenger aircraft and using them for cargo flights, that in the short term can generate some revenue. It’s never going to generate as much revenue as the passenger flights. But it keeps the cash coming in and at the moment the rates for cargo are anything up to six times what they were three, four months ago because there is this scarcity and this urgency to move items quickly,” said Grant.
It should be noted that before the coronavirus pandemic, Ethiopian Airlines was Africa’s busiest and largest carrier, making more than 350 flights per day to more than 100 destinations worldwide.
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