Ethiopian Airlines records profits, orders more planes

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Speaking at the Ethiopian parliament on Wednesday, as he presented the airlines’ eight-month performance report, Girma Wake, CEO of Ethiopian Airlines, said that after an agreement signed between the Ethiopian flag carrier and Bombardier Aerospace to purchase eight Q400 NextGen turboprop airliners in November 2008, four additional aircrafts, Bombardier Q400 NextGen turboprop, have been ordered to strengthen its local fleet.

According to Girma the recent decision to add four extra Q400 aircrafts is to enable the Ethiopian flag carrier meet its set local flight target. Bombardier Aerospace’s excellent range, payload capability as well as their low operating costs contributed to their being selected by the airline.

The first order would cost the Ethiopian Airlines a total sum of $ 242 million and an extra $124 million for the four aircrafts. The agreement signed for the additional aircrafts is conditional, Girma told MPs, “It is an agreement made as an option, we could go on with the agreement or we could terminate it”.

Last year, Grima Wake told journalists “the planes we are buying now are for 2010, we have no more problem of financing at the moment, we know the financial banks will be strict but the interest from buyers would be limited, so we can negotiate.”

Last year’s projected passenger traffic within the Ethiopian Airlines network was expected to increase significantly to three million, up from the 2.5 million the airline posted that same year.

Revealing his company’s astonishing performance despite the industry’s market slow down, Wednesday, Girma Wake indicated that within the last eight months the airlines made $78 million in profits, a 53 percent growth against the last Ethiopian fiscal year.

Using graphs to illustrate his administration’s struggle with the current global situation, Girma said the airline industry lost some $ 8.5 billion in 2008 due to the financial and economic crisis. He also indicated that some $ 4.7 billion is expected at the end of 2009.

In November last year, Ethiopian Airlines projected its earnings to soar to US$ 1.2 billion with a profit margin of more than US$ 50 million anticipated for the full fiscal year as the airline maintained a stable outlook despite the financial turmoil in Europe and the United States, which also badly hit the African aviation industry.

In a report late last year, the International Air Transport Association (AITA) warned that Africa would not be spared by the effects of the global financial downturn. Africa, which was emerging as a major power of aviation growth saw an 8.9 per cent traffic slow down, as African flights to Europe recorded a 7-10 per cent decline as a result of the global financial crisis.

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