Ethiopian Airlines pocketed record revenues in the first six months of the current 2011/12 fiscal year enabling the flag carrier to remain in the black absorbing fuel price hike that heavily injured the aviation industry, Capital learnt.
During the six months, from July 8, 2011 to January 9, 2012, the carrier has registered “remarkable growth,” says Ethiopian Chief Executive Officer Tewolde Gebremariam.
In a letter dated February 23 and addressed to all employees, the CEO said the airliner sustained profitability, socking up expenses that soared dramatically in the first six months of the fiscal year. “The increase [of expenses] is partly due to increase of operations but mainly due to rate increases [of fuel costs]; fuel cost represents about 50 percent of our total cost which is almost beyond our control,” Tewolde said in the letter.
According to this letter Capital obtained, Ethiopian’s fuel expense in the six month nearly doubled to 8.1 billion birr from 4.1 billion birr of same period in the previous year.
The CEO says the aviation industry is facing a perfect storm; unsustainable and high fuel prices, a Euro zone sovereign debt crisis, a weak American economy and slow down of emerging markets’ economic growth have all teamed together; posing a threat to the sector. These have affected Ethiopian as well, the CEO admitted: “Our profit margin has declined from the previous year.”
Though the profit margin slips, Ethiopian remains in the black as income absorbed the 55 percent soaring of expense with record operating revenues that climbed by 50.4 percent in the period which are also aided by cost reductions, according to the CEO.
Tewolde says while some carriers saw their demise, and other choose to downsize operations, Ethiopian has however expanded operations and introduced a 20 percent general salary increase to employees made effective January 1st.
Ethiopian financial books are yet to close but the airliner recorded strong growth, according to Wogayehu Terefe, Ethiopian Manager of Public Relations and Publications.
“In line with its fast, profitable and sustainable growth strategy outlined in vision 2025, compared to the same period last year, Ethiopian registered strong growth in the last six months which makes the airline the fastest growing African airline and one of the fastest in the world,” Wogayehu told Capital.
The airlines’ capacity availed measured in terms of available seat kilometer increased by 31.2 percent while passengers’ number and freight uplift surge by 32.5 percent and 14.9 percent respectively during the period, Wogayehu added.
Ethiopian says it has employed cost saving, revenue maximizing and operation excellence and high standards of customer service techniques aiming at keeping its number one spot in the continent in the face of troubled global economic outlook.
Ethiopian was named Africa’s most profitable airline by Air Transport World in 2010. The African Aviation News Portal also awarded Ethiopian “Gold” in the African Airline of the Year 2011/2012 Awards.
The African Aviation News, in its news release of February 2012, stated that Ethiopian Airlines emerged ahead of the pack collecting the highest number of the votes by the readers and followers of African Aviation. Readers voted in an online poll set up at the African Aviation’s website as well as in the various industry meetings and airline congress events.