Ethiopia’s new plane gives it an edge over African rivals

Ethiopia Airlines’ acquisition of the Boeing 787 Dreamliner has given it a competitive edge over its peers in Africa in fleet expansion and modernisation.

A first on the continent and second after Japan, the aeroplane puts the airline above rivals such as Kenya Airways, South African Airways, Egypt Air, and other international operators.

The airline’s chief executive officer, Tewolde GebreMariam, said the airline is on track to meet its expansion and fleet modernisation strategy.

“After pioneering African aviation for the past 67 years, it is only natural for us to deploy our first B787 in Africa. In affirmation of its commitment as Africa’s flagship carrier, we are naming our first B787 Dreamliner ‘Africa First,’” Mr Tewolde said in a statement, adding that once the airline takes delivery of its second Dreamliner, it will operate on an assigned scheduled route to be announced soon.

The airline launched its African operating rotation flights to African destinations such as Kilimanjaro, Mombasa, Harare, Lusaka, Nairobi, Entebbe, Lagos, Johannesburg, Abuja, Malabo, Douala, Lomé, Accra, Maputo, Luanda as well as to Dubai, Mumbai, Rome, London, and Frankfurt, which began on 19 August.

Currently, Ethiopia Airlines serves 69 international, 43 African, and 17 domestic destinations and has 47 aircraft. It targets to be Africa’s largest carrier by 2025 with 199 aircraft, almost double that planned by Kenya Airways.

Kenya Airways through its spokesperson, however, discounted any fears of being out-competed, saying this cannot in any way derail KQ’s expansion plans.

“It doesn’t really affect our strategy as the main issue is not just about fleet expansion but about customer service. Competition will now be based on customer service and not necessarily the type of fleet,” said Mr Chris Karanja on the phone.

In December 2011, Kenya Airways received the experimental Boeing 787-8 Dreamliner after making an inaugural stopover at the Jomo Kenyatta International Airport on a world tour.

Vision 2021

The airline is set to receive nine Dreamliners to be delivered by 2014 as part of its vision 2021 fleet expansion and modernisation plan.

The national carrier intends to triple its fleet to 107 from 35 and increase the number of destinations to 115 from the current 55 by 2021. It also intends to increase its cargo fleet to 12 from the current single freighter and fly to every capital city on the African continent by 2017.

South African Airways is also seeking to expand its network in Africa by flying to every capital city on the continent, a strategy that KQ said it would pursue given Africa’s high potential for growth.

The airline is in talks with the government on financing its growth strategy that includes growing the number of long-haul aircraft in the next five years and consolidating its short-haul routes under the Aircraft Renewal Programme.

Other global airlines that have also intensified their scramble for the African market include Emirates, Etihad, Qatar Airways, and Turkish Airlines.

Emirates Airline is the most aggressive competitor in the growing Africa and Asia market, followed by Qatar Airways and Etihad.

Emirates commands a 41 per cent share of Africa — whereas Kenya Airways, in sixth place, has only a 16 per cent share, analysts say.

Recently, Kenya Airways sought Sh20.6 billion for fleet expansion and modernisation through a rights issue but only managed to raise Sh14.5 billion — 70.06 per cent of the total amount it sought to raise.

The International Finance Corporation (IFC) has, however, committed to extend Sh6.8 billion ($80 million), covering the Sh6.18 billion shortfall after the cash call results.

The national carrier has already placed orders for 21 aircraft set for delivery in the 2013 – 2016 period. It has ordered Boeing 777-300ER, Boeing 787-8, and Embraer 190, which are set to offer direct operating cost savings of about 15 per cent over its older aircraft types, given their fuel efficiency.