Following the worst crisis commercial aviation has ever experienced, Ethiopian Airlines is now cash positive and profitable, its chief executive officer Tewolde Gebremariam said on Thursday. How it got there? Riding the updraft of a booming air freight market.
E-commerce and medical supplies
When physical stores closed down, people suffering from lockdown boredom took to online retail therapy. As entry restrictions erupted across the globe, regular supply chains were disrupted. As a result, the e-commerce business flourished, Jeff Bezos added a few more billions to his fortune, and airlines were thrown a lifeline in the form of soaring air cargo demand.
Passenger seats were quickly expelled from widebody aircraft in so-called ‘preighters’ to make space for more cargo – for some time nearly worth its weight in gold. Ethiopian Airlines was one of the first commercial carriers to turn to freight to generate revenue throughout COVID. It has succeeded in keeping the momentum going.
“For us, Ethiopian Airlines, the cargo business is strong and I would say is a breadwinner in the group,” Gebremariam said during a video link to a conference in Dubai, as reported by Reuters. “We are cash-positive. We are profitable,” he continued.
Strategic hub for pharma and goods
The crisis has seen the airline and Addis Ababa become an important hub for the transport of vaccines and other medical supplies onwards to the continent. Ethiopian Airlines also strengthened its position as Africa’s leading pharmaceutical carrier at the end of last year when it received the Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) certification.
The Ethiopian Airlines CEO further stated that his airline had made it through the pandemic this far with its own finances and without relying on any bailouts. It has even offered pay-rises and bonuses to airline staff. The carrier is now back to about 70% of pre-pandemic operations.
No signs of slowing down
The LoadStar is reporting that there is no expectation of air cargo demand – or rates – dropping any time soon. With passenger traffic again slowing down due to Omicron concerns, belly capacity is reducing, and airlines with dedicated cargo fleets stand to gain.
Ethiopian Airlines operates three permanently converted Boeing 737-800s and nine 777Fs. However, at the height of the crisis, it converted several Airbus A350s, Boeing 787 Dreamliners, 777s, 767s, and additional 737s in order to boost cargo capacity.
No passengers to Dubai since Christmas
Meanwhile, passenger airline traffic is still far from making a recovery, Gebremariam warned his fellow conference-goers. He criticized what he sees as fragmented approaches from governments, creating bottlenecks and slowing down recovery.
Dubai, the host of the event, currently has an entry and transit ban in place on those who have been in Ethiopia and 13 other African countries. As a result, Ethiopian Airlines has not flown passengers to Dubai since Christmas.