Ethiopian Airlines lost a staggering US$550m in the first quarter of this year, a figure that’s simply unsustainable.
Despite continuing to fly to China when nobody else would during mid February and onward, the airline has had to ground most of its fleet because other countries have closed borders, rather than it volunteer to stop flying.
In many ways Ethiopian is one of the worlds most crucial and important airlines, being the only major global level airline on the African continent. It binds together most African nations, providing access to Europe and North America as well as Asia. Only Emirates and to a lesser extent Qatar, have any serious competition for the airline.
The financial status of the airline is reasonable, it’s considered stronger than most, but even so this type of loss is breathtaking in scale and it can’t go on. Ethiopia’s government isn’t cash rich and rolling in oil money to just bail it out if it came to it.
The airline says its decided to strengthen its cargo operations and is making the most of the shortage – especially in Africa – of air freight. It might help, but that scale of loss is hardly going to be rebalanced from a few extra cargo flights.
In more bad news for Boeing and Airbus, the airline is negotiating indefinite deferments of replacement aircraft.
Ethiopian is a strong airline with excellent managers, for all of Africa it has to survive.