African Countries Contemplate New Multinational Airline

 - October 11, 2016, 9:33 AM
Ethiopian Airlines Group CEO Tewolde Gebremariam warns that outside influences will dominate the continent's airline industry if African carriers do not combine resources to achieve critical mass. (Photo: Kaleyesus Bekele)

Seven countries in eastern, central and southern Africa have begun talks aimed at establishing a multinational Pan African Airline.  Africa’s largest airline, Ethiopian Airlines, initiated the talks, Ethiopian Airlines Group CEO Tewolde Gebremariam told AIN on the carrier’s inaugural flight to Windhoek, Namibia, on October 6. The proposal to the governments of Zambia, Zimbabwe, Uganda, Rwanda, Namibia, DRC Congo and Botswana calls for the Pan African airline to establish a base in central or southern Africa, from which it would run domestic, regional and international flight services.    

According to Tewolde, African carriers face stiff competition from non-African carriers, particularly the dominant Persian Gulf carriers. The three Middle Eastern giants--Emirates, Qatar Airways and Etihad Airways--have put Africa at the center of their growth strategy. Some European carriers and Turkish airlines also control significant market share in Africa. Turkish Airlines flies to more than 40 destinations in Africa, for example. Today, non-African airlines carry 80 percent of African passenger traffic.

“African carriers are being driven out of the market,” said Tewolde. “Some ten years ago African carriers had forty percent market share on the intra-African market. This has dwindled to 20 percent. Unless we wake up and do something today, ten years from now there will be no homegrown African airline. It will be the end of the African airline industry.” 

According to Tewolde, airlines need critical mass to survive. “Size matters,” he said. “So are gone the days that every African country needs to have its own small national flag carrier. This mindset has to change. You cannot survive the mounting tremendous competition with small airlines operating a couple of aircraft. You need to have the minimum number of fleet that justifies the economies of scale.”

Toward that end, the countries of eastern, central and southern Africa must combine their resources, Tewolde said.  “Unless we collaborate, the giant carriers would swallow us for lunch,” he warned.            

Tewolde said Ethiopian Airlines, which not only ranks as the largest airline in Africa,  but the most profitable, stands ready and willing lead and assist with the endeavor. “We can provide technical assistance,” he noted. “We have the know-how and expertise.”

Tewolde said the countries of Africa’s great lakes region have responded positively to the overture.   

Ethiopian Airlines has invested in ASKY Airlines in West Africa and in Malawi Airlines in southern Africa. It is also in the process of forging a strategic partnership with RwandAir.