Ethiopian Airlines acquires 49pc stake in Malawian Air
Posted Monday, July 15 2013 at 16:17
Ethiopian Airlines has acquired a 49 per cent stake in the new Malawian Air, a move that will give Ethiopia’s national carrier a third hub in Africa.
The airline in a statement has said that the remaining 51 per cent of the shares will be held by the Malawian Government and Malawian private investors.
“Through this strategic partnership with Malawian Air, Lilongwe will become Ethiopian third hub on the continent after its main hub in Addis Ababa and its West Africa in Lomé,” said Ethiopian Airlines in a statement.
Ethiopian Airlines said that Africa’s demand for air travel is growing at a much faster pace than the global average and that this growing demand and the uneven competition from foreign carriers, which currently dominate the African market, cannot be overcome by one single African airline.
It said that for indigenous African airlines to succeed and get their fair share of the market, partnerships between African airlines are now a must.
Ethiopian Airlines, which has a fleet of 58 aircrafts with 37 more on order flies to 73 international and 17 domestic destinations while Malawian Air which has a fleet of two flies to six destinations including Lilongwe, Johannesburg, Harare, Dar es Salaam and Lusaka.
Ethiopian Airlines said that following the agreement with the newly formed Malawi Airlines, flight schedules will be harmonized to and from the Southern Africa region.
Two weeks ago the International Air Transport Association (IATA) said that global passenger traffic results for May showed that air travel continued to expand with growth being led by emerging markets.
It said that compared to a year ago demand rose 5.6 per cent, capacity climbed 5.2 per cent pushing the load factor up 0.3 percentage points to 78.1 per cent.
IATA said that African airlines’ traffic climbed 9.8 per cent in May, second highest among the regions after Middle East Carriers which had the strongest year-on-year traffic growth for any region at 11.7 per cent.
The organization, which represents 240 airlines comprising 84 per cent of global air traffic, said that African carriers are also benefitting from a sustained increase in trade through developing links to Asia and the Middle East, as well as from strong economic growth in local economies, particularly in Western Africa.
IATA said that demand for air travel continues to be strong despite less-than-robust economic indicators in some key markets, a further demonstration of the importance of air transport.
It however said that that importance does not carry through to the bottom line and that this year airlines are expected to make $12.7 billion profits on $711 billion in revenues translating to a 1.8 per cent net profit margin or about $4 profit for every passenger.
“The average profit per passenger is just enough to buy a sandwich in most parts of the world. Aviation will have to do much better than that in order to attract the $4 to $5 trillion in capital investment that will be needed over the next 20 years to meet the demands for aviation-enabled connectivity,” said Tony Tyler, IATA’s director general and chief executive officer.