Ethiopian Airlines Navigates the Covid Pandemic: A Successful Recovery Amid Challenges

Ethiopian Airlines, Africa’s sole profitable carrier, adeptly weathered the challenges posed by the Covid-19 pandemic by implementing a strategic shift.

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Despite significant growth in passenger and cargo traffic, the airline still confronts genuine hurdles, including sourcing spare parts and maintaining competitiveness amidst inflation.

In an interview, CEO Mesfin Tasew shared the company’s achievements and its plans for the future.

A Remarkable Recovery:

For the financial year ending June 30, 2022-2023, Ethiopian Airlines achieved remarkable success.

Passenger numbers surged by 57% compared to the previous year, surpassing pre-pandemic figures by 10%.

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Additionally, cargo transportation almost doubled its pre-Covid levels.

The airline recorded revenue of $6.1 billion, a 20% increase over the previous year and nearly 50% more than pre-pandemic earnings.

This robust performance indicated a full recovery from the pandemic’s impact.

Challenges in the Wake of Covid:

Despite the recovery, Ethiopian Airlines still faces challenges related to the pandemic’s aftermath.

High inflation has translated into elevated operating costs and fuel prices, affecting the airline’s expenses.

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Furthermore, disruptions to the global supply chain have led to a shortage of spare parts, causing the grounding of some aircraft.

Although the CEO expects the parts problem to be resolved within three years, it remains a current and genuine challenge.

Staying Competitive in a Changing Landscape:

With the aviation industry recovering and an increase in flights, potential overcapacity may lead to a decline in airfares.

To remain competitive, Ethiopian Airlines must reevaluate its cost structure and focus on cost-saving initiatives.

Such efforts will be crucial for the airline to maintain its edge in the market.

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Addressing Legal Concerns:

Beyond operational challenges, Ethiopian Airlines faces legal issues, including a lawsuit alleging discrimination against travelers from the war-affected Tigray region.

However, the controversies have not negatively impacted the airline’s financial performance.

Future Objectives:

Despite the challenges, Ethiopian Airlines has ambitious objectives for its future growth.

By 2035, the company aims to increase annual passenger traffic to over 60 million, expand its international destinations from 130 to 207, and nearly double its fleet size to 271 planes.

Additionally, the airline is committed to developing a sustainability strategy to achieve net-zero emissions by 2050.

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The Road to Sustainability:

In its pursuit of sustainability, Ethiopian Airlines is exploring the use of sustainable aviation fuel (SAF).

Although SAF holds promise in reducing carbon emissions, its limited availability and high cost remain significant obstacles.

At present, SAF is twice as expensive as conventional jet fuel, posing financial challenges to its implementation.

Moreover, the lack of SAF manufacturers in Africa adds to the complexity of adopting this eco-friendly fuel.

Nevertheless, the CEO remains hopeful that technological advancements will eventually make SAF more affordable and accessible.

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Conclusion:

Ethiopian Airlines’ successful recovery from the Covid-19 pandemic has been noteworthy.

However, the airline continues to grapple with various challenges, such as sourcing spare parts and addressing inflation.

To remain competitive, the company is focused on cost-saving measures.

Meanwhile, it remains committed to its future objectives of expansion and sustainability, aiming for continued growth in the aviation industry.

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