Ethiopian Airlines was making $120 million a month at a time when many airlines were seeking rescue packages and subsidies. How was that possible?
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borkena
June 2, 2020
No airlines are left untouched by the monstrous Coronavirus pandemic. But the way Ethiopian airlines responded to the situation rather turned out to be a new opportunity.
By late March 2020, the airline already lost the bulk of bookings for international flights. A $550 million loss in revenue was reported in early April. A little later, the Airlines suspended over 80 percent of its international destinations grounding over 90 airplanes.
Despite the struggles with the loss of income, the airlines announced that it will not lay off although there was an accusation from the Union that contract workers (Ethiopians, not expatriates) are facing layoffs which the airlines denied.
It was then that the airlines ventured into cargo service in a bid to withstand an economic disaster.
Not before long, the airlines realized that expanding the cargo service is not a matter of choice but of necessity for which the dozens of passenger planes were transformed into cargo planes by tapping in-house technical expertise – which is another stream of income for Ethiopian.
Ethiopian Airlines embarked on transporting COVID 19 related medical supplies, among other items, to several international destinations in Asia, Latin America, and Africa.
There were some opportunities in the passenger’s business too as Ethiopian Airlines was selected to evacuate stranded citizens of some countries. It has evacuated hundreds of Canadians from Africa, for example.
In consequence, Ethiopian Airlines managed not only to survive under the circumstances of the economically affected aviation industry but also it managed to support the Ethiopian economy.
CEO of the airlines, Tewolde Gebremariam, told local state-owned Ethiopian News outlets that Ethiopian was generating up to $120 million dollars per month.
The amount covered the airlines’ expenses that no borrowing or government subsidy was needed.
At times, Ethiopian transported up to 300 tonnes of flowers to different countries daily, according to a report by Ethiopian News Agency.
The Islamic Holy month of Ramada brought another opportunity for Ethiopian cargo service as it was transporting meat products to the gulf countries.
Over 90 percent of the fleets are still grounded.
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