The 787s and re-engined narrowbodies are only part of the fleet expansion, and Ethiopian also has firm orders for 12 Airbus A350-900s, which it intends to use alongside its Boeing 777-200LR fleet. “The 777 and the A350 will be used for ultra long-haul routes. They complement each other,” says Gebremariam, adding that the 777s will help expand the airline’s U.S. network to the west coast, where it targets San Francisco as a new destination.
As with the 787s, a program delay will affect Ethiopian’s delivery schedule, and Gebremariam acknowledges that “Airbus is telling us they will arrive a year later” than the 2017 slots initially planned.
Ethiopian has emerged as one of Africa’s leading long-haul carriers along with Egyptair, Kenya Airways and South African Airways (SAA), and its Bole International Airport hub currently has a 65% connecting traffic share, among the highest in the industry.
Within Africa, its exposure in the northern part of the continent is still limited, because trade links have historically been weaker. But Gebremariam says that they are now developing and Ethiopian also sees opportunities to fly Chinese investors to destinations in the region via Addis Ababa. Chinese business traffic has already been one of the key drivers behind the growth of its Asian routes.
But some aspects of Ethiopian’s strategy have fared less well, notably an initiative with Star Alliance members Egyptair and SAA to develop routes across Africa. The original plan called for the establishment of several joint ventures across the continent, but the program has now focused on developing Togo’s ASKY Airlines, itself a joint venture between Ethiopian and local investors.
While currently serving Togo, Ethiopian wants to expand ASKY to other countries. Ghana is the next target, but Gebremariam notes that “we are waiting for the airport renovation to be completed in Accra.” Ethiopian’s CEO says Accra was picked because many Star Alliance carriers serve the city and ASKY could provide intra-African feed, much more so than it currently does at Togo’s Lome International Airport.
Gebremariam also hopes negotiations with SAA and Egyptair will lead to both of them taking minority stakes in ASKY, but no firm agreement has been reached. Gebremariam notes that “ASKY’s growth and load factors are good, but profitability is still a challenge.”