New aviation partnership puts Ethiopian Airline the biggest player in African continent

ADDIS ABABA - Ethiopian Airlines has signed a lucrative new deal with Nigerian Air which will now see the Addis Ababa-based aviation player becoming the lead technical partner as well as the single biggest shareholder with a 49 percent stake while the Nigerian Sovereign Fund will take 46 percent.

The remaining five percent will be owned by the Nigerian federal government, according to a deal reported by news agency Reuters.

The deal stipulates that Ethiopia and its partners take over Nigeria Air and build a travel hub in Lagos to serve the West African market.

The deal will now give Ethiopia Airlines a home advantage to fight Kenya Airways which has been one of the biggest beneficiaries of the collapse of Nigeria Air almost two decades ago under a cloud of debt, mismanagement, and corruption.

Nigeria is the biggest aviation market in West Africa and winning the market gives any carrier a numbers advantage.

Ethiopian Airlines will be launching three Boeing 737-800 planes and also plans are underway to have 30 jets operating international flights in two years. The Nigeria deal is the latest acquisition of continental carriers.

Ethiopian Airlines' continental aviation dominance

• Ethiopian Airlines Group owns 24 percent shareholding in African sky (ASKY) based in Lomé Togo.
• 49 percent shareholding in Malawi Airlines based in Lilongwe Malawi.
• 45 percent of Zambia Airways
• 49 percent shareholding Tchadia airlines 99 percent shareholding Ethiopian Mozambique Airlines LTD.
• 51 percent Shareholding DHL-ET Logistics Services.

The Airline which is fully owned by the Ethiopian Government flies over 127 international routes, more than 62 destinations in Africa, and 22 domestic locations.

The airline has been expanding its network from the Chinese city of Chongqing, flights to Garowe and Bosaso, Somalia, operations to the City of Beira in Central Mozambique, Athens, Bangkok & Hanoi, and started flight Services to India, adding Bengaluru to its network.

It has overtaken the Pride of Africa, Kenya Airways which has been struggling financially due to poor investment decisions.

Currently, KQ flies to 42 destinations worldwide, 35 of which are in Africa.

Ethiopia has taken the fight to West Africa which is shaping as the next frontier for competition among Pan African airlines with struggling State airlines KQ and South African Airways also keen on the route under their plan to build a Pan African franchise.

Kenya Airways recently inked a codeshare agreement with Africa World Airlines, a West African regional airline operating out of Ghana, to expand joint reach in the domestic, African, and international routes.

"Our combined networks will allow our customers the convenience of seamless onward connectivity to and from the Kenya Airways network onto Africa World Airlines' network. It is imperative that we continue to interlink Africa and allow access within Africa for our passengers," said Adedayo Olawuyi, head of the commercial for Africa World Airlines in a statement.

The West African market has been important to Kenyan Airlines and the Ghana deal will make it easy for KQ customers to access Accra directly from Nairobi as well as ply West Africa and international routes jointly, which is seen as a move to consolidate the region.

Africa's most populous country's previous national carrier, Nigeria Airways, was founded in 1958 and wholly owned by the government but ceased to operate in 2003.

Nigeria has been seeking to set up a national carrier and develop its aviation infrastructure - currently seen as a barrier to economic growth - to create a hub for West Africa.

Ethiopia’s entry through Nigeria offers a big market to the growing airline although the market is difficult since Lagos is not a preferred transit point, with forex control challenges that make getting money out harder.

While other airlines were reporting losses, Ethiopian Airlines which operates in a similar environment at home is not fazed, it has an advantage over the competition being among the few airlines in the world which turned a profit in 2020 despite the Covid-19 pandemic.

GAROWE ONLINE