Ethiopian Airlines records $260 million profit in FY 2018-19
Ethiopian Airlines has earned an operating profit of $260 million for the fiscal year 2018-2019 that ended in June 2019.
October 07, 2019: Ethiopian Airlines has earned an operating profit of $260 million for the fiscal year 2018-2019 that ended in June 2019. According to Reuters, the group chief executive officer of the airline Tewolde Gebremariam said in an interview last month that the passenger numbers had increased by 14 percent.
Gebremariam told The Reporter that the 2018-2019 fiscal year was the most challenging year in the history of the 73-year-old airline. “As you know the 2018-2019 was a very challenging year. In fact, we believe that it was the toughest year in our history,” he said.
He stated that the national carrier generated $4 billion operating revenue and made a net profit of $189 million. Passenger number grew by 17 percent to 12.1 million, a record high number of passengers. Ethiopian Cargo transported 432,000 tonnes of cargo in the year under review.
According to him, the tragic B737-8 MAX plane accident that claimed 157 lives in March was the biggest challenge the airline faced. “We lost our dear colleagues and valued customers and we still remember them in our daily lives. Managing the accident crisis was a challenge,” he said.
In the aftermath of the tragic accident, Ethiopian was the first airline that grounded its MAX fleet. The carrier placed orders for 30 B737-MAX jetliner and took delivery of five and 25 more on its order book when the accident occurred.
The global economic slow down triggered by the US-China trade war, African countries' debt stress, a sudden surge in fuel price are some of the major challenges the airline faced. The price of jet fuel has jumped by 21 percent and this has increased our operating cost. “The decline in Ethiopia’s export has affected us but we moved our cargo planes to Europe and China routes,” he said.
Ethiopian has been unable to repatriate its funds from many African countries. According to the CEO, the airline has almost $100 million stuck in Angola, Sudan, Zimbabwe, and Eritrea. “We have blocked funds in some African countries and we are losing money due to the currency fluctuations. We had discussions with the respective governments but we did not find any solution so far,” he said.
In related news, the management of Ethiopian Airlines has presented a 15-year growth strategy that dubbed Vision 2035 to the board of directors chaired by Abadulla Gemeda, former speaker of the House of People’s Representatives. Gebremariam said the growth strategy would scale up the growth of the airline. Vision 2035 would make Ethiopian a $25 billion company with more than 200 aircraft by 2035. Ethiopian currently operates a young fleet of 121 aircraft with an average age of five years to 125 destinations.
Meanwhile, starting October 27, Ethiopian Airlines will fly direct flights to Bengaluru, India after Mumbai and New Delhi. The service will be operated four times a week.