Ethiopian Airlines has expressed its dissatisfaction with certain component suppliers who have significantly increased the prices of their products, leading to the grounding of some aircraft.
Mesfin Tasew, the Group CEO, stated that the aviation industry has been affected by the rising market prices during the MRO Africa 2024 and African Aviation Training Conference and Exhibition, which were hosted by African Aviation Services Limited in partnership with Ethiopian Airlines Group at the Ethiopian Skylight Hotel this week.
Experts have also expressed their displeasure with suppliers who are taking advantage of the business trend and abusing their dominant position in the industry.
The Group CEO emphasized that the shortage of replacement parts in the aviation sector is putting significant strain on all airlines, including Ethiopian Airlines. “We have grounded a few of our aircraft due to issues with the supply chain.”
During a one-on-one meeting at the event hosted by Nick Fadugba, CEO of African Aviation Services Limited, Mesfin stated, “The problem we are facing today is that we don’t get spare parts when we need them. We want our suppliers to actively work on improving their supply chain and provide innovative solutions. When we order parts, we expect them to be shipped out as quickly as possible.”
Mesfin continued by explaining that due to the lack of equipment, some components that are sent to MROs are not fixed promptly.
He highlighted the significant increase in parts prices and expressed his dissatisfaction with suppliers who are charging inflated prices that do not align with the market.
As the CEO of one of the top MROs in the continent, servicing airlines in Africa and the Middle East, the Group CEO stated, “We believe that some suppliers are taking advantage of the parts shortage to unfairly increase prices.”
He further added, “The prices for certain parts have not just doubled, but in some cases, they have tripled compared to what we used to pay a year or two ago.”
Mesfin expressed his disappointment with the unethical business practices of a few suppliers, noting that not all suppliers behave in this manner.
He emphasized that given the current state of global inflation, price increases are expected, but the company expects fair prices.
Industry analysts, including Fadugba, share the Group CEO’s opinion that parts suppliers are exploiting their dominant position in the business and engaging in abusive practices.
“While the majority of suppliers, possibly up to 95 percent, support us in this situation, I can provide evidence that certain suppliers are charging us three times the recommended amount. Is this fair?” Mesfin complained during the continental MRO event.
In an interview with Capital a few weeks ago, the Group CEO mentioned that during the COVID pandemic, several companies that manufacture aircraft spare parts closed their facilities and laid off employees, making it more challenging to produce and supply the necessary spare parts to the industry.
“We are employing various strategies to manage this situation, including making special agreements with suppliers to receive preferential treatment. However, even after doing this, some of our aircraft remain grounded due to the parts shortage,” he added.
