Happy landing for Ethiopian Airlines: despite the current hostile environment for international air travel, Ethiopian Airlines continues to expand and make profits. Neil Ford highlights the airline's successes.

Author:Ford, Neil
Position:Aviation - Company Profile
 
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The global airline industry is still shaking from a series of security blows, from the 9/11 terrorist attacks in the US, to the war in Iraq and the ongoing twin fears of further terrorist campaigns and security delays. Yet Ethiopian Airlines has managed to buck the trend to become one of Africa's greatest success stories.

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Few industries are as prone to security scares as the airline sector. There is something about airline disasters that affects people in a way that car travel, which is a far more dangerous method of transport, cannot match.

The vast majority of air journeys are not necessary and so can be cancelled if required: from holiday visits that can be postponed or taken closer to home, to business meetings that can be held by telephone or increasingly by using video conferencing. The fact that international flights intrinsically involve two countries, and often several others in between, leaves them vulnerable to changing political situations in those countries.

Yet while Air Afrique collapsed and Swiss Air's stake in South African Airways (SAA) had to be returned to the South African government, Ethiopian Airlines has overcome high insurance premiums to expand worldwide, introducing new routes and purchasing new aircraft, while simultaneously becoming profitable.

The company has put a great deal of effort into making Addis Ababa's Bole International airport a major African hub. A large new terminal building was completed at the company's home airport in January 2003, while a new 3,800 metre runway means that Bole can now handle Boeing 747s and Airbus A-340s.

Ethiopian Airlines has long employed 767-200s and a single 767-300 for long haul flights; four Boeing 757s and one Boeing 737 for medium range services; and Fokker 50s and DHC Twin Otters for domestic routes.

COMING OF INTERNATIONAL AGE

Yet it was the company's decision in November 2002 to sign a $480m contract to purchase six new Boeing aircraft and lease a further six, which finally signalled its arrival as a major international airline.

Under a deal signed in July 2003, the three B737-700s and three B767-300 aircraft are all being financed by Barclays Capital under a United States Export Import Bank guarantee. One of each model was expected to be delivered by the end of 2003, by July 2004 and by July 2005. The new aircraft will replace the ageing B737-200s and B767-200s.

The new terminal increases the airport's handling capacity from 1.3m passengers a...

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