Discussions are underway between the government of Mauritius and Ethiopian Airlines in the revival of the island nation’s state carrier
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.
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
Meanwhile, according to Bloomberg the Airlines Group has almost doubled its cargo capacity and deferred two months of plane-lease payments to help navigate the aviation crisis caused by the Covid-19 outbreak.
Africa’s biggest airline has converted 11 passenger planes to transport goods, adding to an existing fleet of 10 Boeing Co. 777 and two 737 freighters, Chief Executive Officer Tewolde GebreMariam said in an interview. The state-owned carrier has added new cargo destinations in South America, China and Europe and is transporting two planes of cut flowers to the latter continent every day.
“There are new opportunities that are emerging due to the huge investment we have done — we have huge cargo capacity,” the CEO said. “Under the circumstances, Ethiopian Airlines is doing well.”
The closing of borders around the world has put airlines from the U.S. to Australia in jeopardy, and governments have committed at least $85 billion in support of their national carriers to date. Ethiopian is on track to lose almost $1 billion in ticket sales in the 12 months through June thanks to the grounding of almost all its passenger flights, but it hasn’t yet needed to call on its state owner for direct funding despite vocal government support.
“The survival of this airline is key for Ethiopia,” Prime Minister Abiy Ahmed said last week. “Ethiopian Airlines is our connection to the outside world. It is our port, it is our Red Sea, it is our ocean.”
Payments due for grounded leased planes, which account for nearly half of the fleet, have been deferred by two months to June, Tewolde said, adding that plane purchases and deliveries have been suspended. The government is helping to negotiate with China and international financial institutions about a restructuring of debt repayments, the CEO said.
Ethiopian remains in talks with Boeing about compensation following a fatal crash in March of last year, which led to the grounding of the Max jet. Tewolde reiterated that, should the plane resume flying, Ethiopian will be the last carrier to use it.