Ethiopia’s flag carrier has become one of the first major airline companies to register a profit as cargo revenues helped weather a steep drop in passenger numbers prompted by the coronavirus pandemic.
The carriers chief executive said on Tuesday that the airline is profitable and cash positive underpinned by demand for air cargo.
This comes as airlines are resulting to cargo business and technology, now that freight revenue has become crucial to their business.
Tewolde GebreMariam noted how cargo is now a recognised key revenue stream, the airline has invested since the onset of the pandemic.
“For us, Ethiopian Airlines, the cargo business is strong and I would say is a breadwinner in the group,” CEO Tewolde Gebremariam told a Dubai conference by video link.
The air freight market has been a rare bright spot for airlines over the past two years, with rates rising due to an online shopping surge and pandemic-linked supply chain disruptions driving demand for cargo space.
According to IATA numbers, Last year’s Cargo contribution to revenue soared, from 10% to 15% of turnover pre-crisis, to 30% to 35%.
“Cargo is now one-third of the airline business,” said IATA chief economist Brian Pearce. “It used to be significant, but not the most important part of the business.”
Ethiopian navigated the pandemic with its finances and without bailouts, and operated close to 70% of its pre-pandemic capacity, in addition to offering staff pay raises and bonuses.
Moreover, Ethiopian recently launched the Mobile App to aid customers in checking flight schedules, submitting enquiries, receiving notifications when the shipment is ready, booking charter flights and track shipments.
But Gebremariam is however cautiously optimistic that the industry was still far from a full recovery from the crisis.
In response to the back and forth travel restrictions seen imposed by most countries due to Omicron covid variant, Gebremariam criticised what he called the “fragmented, uncoordinated” responses by governments around the world to the pandemic, which he blamed for creating bottlenecks and the slow recovery in passenger travel.
He also singled out Dubai of the United Arab Emirates, the Middle East travel hub, which has banned those who have recently been in Ethiopia and 13 other African countries from entering or transiting.
“I don’t think that helps for the travel and tourism and economy of Dubai as well.”
