In early March, Ethiopian Airlines CEO Tewolde Gebremarium told an aviation conference in Addis Ababa the coronavirus pandemic was “a temporary problem” – comparable to a natural disaster or a spike in oil prices.
Now, several weeks later Africa’s largest flight carrier is locked in what Tewolde is describing as “a struggle that we’re performing for survival.” The airline has been ramping up cargo operations while seeking to defer lease payments on aircraft.
“To be honest with you, I had never thought that it would reach this stage,” Tewolde told AFP in an interview this week. “I had never thought that it would spread like this at this speed, and also in this magnitude. It is just too fast and too expansive and it’s beyond imagination.”
Across Africa, airlines stand to lose $6 billion in passenger revenue in 2020 compared to last year because of the coronavirus, the International Air Transport Association has predicted.
Ethiopian Airlines, the state-owned jewel of the national economy and a vital source of foreign currency, says it is facing a revenue loss of $550 million from January to April alone.
Even with the airline now assuming a critical role in Africa’s pandemic response, ferrying deeply needed medical equipment across the continent – it may not last three more months before seeking outside financial aid, says Tewolde.
“Will we be able to sustain with only 15% of our revenue?” he says, referring to the amount typically brought in by cargo. “For a short period of time, yes. But for how long? Very difficult to predict.”
The Airline’s Response to the Crisis
Ethiopian Airlines has been praised by top Washington and Tokyo officials for repatriating their nationals – including US Peace Corps volunteers based in 12 countries across the continent.
With the severity of the crisis becoming clear, Ethiopian executives “reached out to the diplomatic community to offer further cargo services and highlight their ability to offer chartered/special flights”, a State Department official said in a statement to AFP.
At this point the airline has “supported the transport of over 2,100 US citizens and legal permanent residents” to the tune of around $4.7 million, the officials said.
The airline is expecting to be involved in a critical capacity in Africa’s pandemic response. On Monday it finished distributing the second batch of masks, testing kits, ventilators, and other supplies donated to African countries by Chinese billionaire Jack Ma.
And last week the United Nations opened an aid transport hub in Addis Ababa that will rely on Ethiopian cargo jets to move supplies and aid workers across the continent.
Tewolde said this represented “a continuation of our leadership in Africa” even during periods of conflict or outbreaks of other diseases like Ebola.
“All kinds of problems that Africa has suffered, we have always stood with Africa,” he says.
Turnaround Plan
As the financial toll continues to mount for Ethiopian, the company has been in talks to defer lease payments on aircraft and it may seek deferrals on some payments of $2-billion in debt, says Tewolde.
He continues to say that the company is determined not to lay off members of its regular workforce, though it could resort to pay cuts depending on how long the crisis lasts.
Tewolde assures that Ethiopian remains committed to long-term growth plans including building a new $5-billion airport outside Addis Ababa.
“We will do whatever it takes to make sure that we survive.”
Source: Itnewsafrica
