Ethiopia’s national carrier Ethiopian Airlines says it is open to assisting South African Airways to stay afloat, if it has called on to. The airline, the oldest surviving on the continent says Africa needs more home-grown carriers.
Publicly owned Ethiopian Airlines has been flying for over 70 years. The airline says despite recently expanding its fleet, it can’t satisfy the aviation demand in Africa.
According to the African Union, African companies only have 20% of the market.
Ethiopian Airlines’ Chief Executive Officer says the firm is willing to help South African Airways to keep African players in the skies.
”We want South African Airways to support us in keeping African aviation by Africans for Africans. I don’t mean to close doors for other airlines but at least to maintain our own market share. Fifty/50 would be a good market share but we are only 20%, because of that we want to help other sister countries to develop their own national carrier so that put together we can compete with the rest of the world,” says Chief Executive Officer Tewolde Gebre Mariam.
Ethiopian airlines have stakes in the national airlines of Chad, Togo, Malawi and Mozambique.
The Chief Executive Officer says it is a risky industry. “This business is very sensitive, you know in good time, the margin is around 3 to 5%, very small, so if you make a small mistake, then it goes. So we want to make sure that the right business model is being followed.”
South African Airways is not the only African airline struggling to stay in the sky. In Kenya, the parliament has approved the renationalisation of Kenya Airways, the national Carrier, which was 51.1% privately owned.
The loss making airline was privatised 23 years ago. It says it was forced to restructure its $2 billion dollar debt in 2017, after its expansion plan failed to attract customers.
African carriers say business is low partly because accessing the African markets is tough. They have to grapple with strict licencing requirements, weak infrastructure and low ticket prices.
They say that drags income down.
“Most African states have not liberalised their skies. You cannot have additional frequencies to a destination, it is a challenge to get things like 5th freedoms from one country to the other. It is quite a challenge for you to increase your frequency to a certain destination irrespective of whether you have a fleet and then of course weak infrastructure in terms of most African airports are not developed, we have bad runaways where big planes cannot land,” says Ethiopia Country Manager Kenya Airways Kenneth Kenei.
The African Union hopes to ease this through the Single African Air Transport Market agreement, signed in 2018. However, it says member states have been slow to implement it so far.
Ethiopian Airlines says the only way to achieve this continental goal is for African carriers to support each other to stay in the sky.