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May 26, 2024
Ethiopian Airlines is outperforming African carriers
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Africa’s most profitable airline, Ethiopia Airlines has taken positive steps to promote travel and air service connectivity throughout the pandemic. This includes accepting vaccinated travelers without restrictions, managing the cost of PCR testing to ensure it is affordable, and implementing a testing regime that accepts both PCR and rapid antigen tests. These measures have put the carrier on a faster track to recovery, not just for air transport but across the economy. As a result, Ethiopian Airlines is outperforming African carriers as a whole, particularly in the African continent’s average demand for air transport services. 

Heavy toll

It goes without saying that Covid-19 has had a heavy toll on the world economy and aviation has been one of the hardest-hit industries. While the pandemic is slowly coming to an end thanks to vaccination schemes, and the prevalence of herd immunity, combined with high-season demand, global airlines are looking to make a gradual recovery from the pandemic toll.

In the case of the African aviation industry, the continent had a strained, albeit promising aviation industry before the pandemic. Nigeria, for instance, was pushing the boundaries in terms of airline numbers and new airports, along with rising African flyers such as RwandAir appearing alongside major carriers that included Ethiopian Airlines and Egypt Air.  That said, the continent still has challenges to overcome due to the general lack of resources, weak MRO capabilities, and aging aircraft fleets.

Ethiopian’s enviable statistics

Statistics show that Africa is the region experiencing the highest decrease in passenger demand due to the pandemic, raising concerns that regional recovery may not return to pre-pandemic levels for some time. This would be a severe blow to the continent since a powerful aviation network is needed to maintain the continent’s economic and social development momentum.

It could take up to two more years for African aviation to return to the performance levels observed in 2019. Since the majority of African countries do not have the luxury of government bailouts, several proposals have been made to keep the industry alive and put it on the path to recovery.

Ethiopian Airlines is outperforming African airlines in terms of passenger traffic.  Boardings to, from, and within Ethiopia in June 2021 were only 30% less than in June 2019, a significant improvement on the 47% drop in the same January period. Ethiopia’s June performance was well ahead of the overall 66.6% drop (compared to 2019) recorded for the entire African continent.  Passenger demand is not expected to recover to pre-COVID levels for the continent until at least 2023.

Africa needs to establish a set of key priorities to support and sustain a recovery in aviation.  These include digitalization of health certificates, releasing blocked funds, and the Single African Air Transport Market (SAATM), equitable distribution of COVID-19 vaccines.  

Digitalization of health certificates is essential to provide a standardized basis for travel documentation. As passenger numbers increase in the recovery, digitally managing travel health credentials will be essential to avoid queuing and crowding airports. The African Union’s Trusted Travel Pass and the IATA Travel Pass are both tools that can help governments efficiently and conveniently verify traveler health credentials. 

Releasing Blocked Funds: Approximately $59 million (as of August) in airline funds are being blocked from repatriation in Ethiopia. Resolving this quickly is critical for airlines to continue providing connectivity needed to sustain jobs and energize economies as they recover from COVID-19.

Single African Air Transport Market (SAATM)

The SAATM was the solution to unlocking travel within the African continent pre-pandemic. Post-pandemic it will provide an even more important economic boost to the continent. Full implementation of SAATM across the continent would generate significant economic benefits for Ethiopia, namely creating 21,000 new jobs and adding $81.8 million to the Gross Domestic Product (GDP).

Equitable distribution of COVID-19 vaccines

With low vaccination rates across Africa, the continent and its people are vulnerable and the economic recovery from COVID-19 is at risk. Moreover, with more countries lifting travel restrictions for those vaccinated (as the US announced yesterday), the freedom of movement will be limited until vaccines are universally available. With less than 1% of Ethiopia’s population fully vaccinated, the challenge is particularly acute. 

IATA’s Regional Vice President for Africa and the Middle East, Kamil Alawadhi congratulated Ethiopia for the positive steps it has taken to promote travel and air service connectivity throughout the pandemic. “Nations, governments, politicians, and businesses must cooperate through COVAX so that everyone gets access to the vaccines they require, no matter where they are,” said Alawadhi.

AFRAA’s commitment to airlines

The African Airlines Association (AFRAA) has created an outline plan to assist airlines in their return to normal operations. The plan details the various roles that individuals and organizations play in the recovery effort; from clients all the way up to aviation authorities and governments, each group has been assigned certain tasks to increase overall efficiency and make strategic choices that in combination should put African airlines on the way to recovery.  

Alongside the release of this plan, the AFRAA together with the United Nations Commission for Africa (UNECA) is conducting research to assess the impact of the pandemic on African airlines, intending to use the results to bid for governmental financial support for airlines.  The 2020 loss for African Aviation is $7.7 billion, and that number doesn’t count losses for 2021 and likely 2022 and 2023.  The road to recovery will not be an easy one.  To date, despite the unfortunate crash of their 737 MAX, Ethiopian Airlines is outperforming African carriers and is leading the recovery on the continent.

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