Ethiopia: Ethiopian Airlines postpones Airbus purchasing order?

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Ethiopian Airlines may postpone a purchase order of 12 Airbus A350 XWB for an unidentified period of time until they ascertain the technical performance of the aircraft, sources close to the airline have indicated. This comes in a backdrop of a massive one hundred sixty five per cent performance boost for the Ethiopian national carrier. The Airbus purchase is expected to diversify the airlines’ fleet.

According to sources close to the airline, “any responsible company should be confident before making any … procurements and that is why we need to postpone the set time limit… before going ahead with the purchase”.

However, Wogayehu Terefe, acting public relations manager of the airline, has dismissed the allegations as untrue. “Ethiopian Airlines refutes the statement as reported and hereby reiterates and reaffirms that it has signed a Memorandum of Understanding with Airbus for 12 A350-900 purchases and intends to sign a definitive agreement in due course,” she told

Ethiopian airlines was expected to confirm the purchase order within two months according to the memorandum of understanding signed two weeks ago with Airbus. The purchase should diversify the airlines’ fleet and also loosen their one way ties with Boeing.

Girma Wake, CEO of the Ethiopian national carrier, revealed last Friday August 7, 2009 during a press briefing that the airlines was faced with some uncertainties. He recently confirmed an agreement with Boeing for the delivery of five B777.

“Yes, we signed the agreement (with Airbus) but we have not tested the performance of the aircraft and are relying on what Airbus engineers have told us” he told journalists. He also indicated that his engineers are currently consulting with the airline’s management, who have in turn queried Airbus on a number of issues.

Meanwhile, the delivery of five B777 aircrafts, valued at $ 1.3 billion, is expected by next year, while the purchase of the 12 Airbus A350, which is currently on the drawing board, will cost Ethiopian Airlines some US $ 2.9 billion if an agreement is reached. The source also revealed that the purchase postponement is not an issue of concern to Airbus.

Performance boost

Unveiling the concluded 2008/09 budget year performance, Ethiopian CEO Girma Wake last Friday told reporters that the airline has generated 12.2 billion birr in operating revenue, a 32.8 increase from the previous year. But although the previous fiscal year, 2007/08, had generated only 9.2 billion birr, it had out performed the latest revenue as it had grown by 34 per cent from 2006/07.

During last week’s press conference, Girma Wake revealed that the airline was only a few hundred millions short from almost tripling the previous year’s 507 million birr net profit. With a net profit of 1,345 million birr, the airlines has registered a staggering one hundred sixty five per cent performance boost.

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