Unlike the global trend, Ethiopian Airlines (ET) projects to reel in 80 percent of its business relative to the pre COVID 19 era performance by the end of this year.
The International Air Transport Association (IATA) estimates that the aviation industry shall recover from the COVID 19 impact by the end of 2023.
The global aviation business is still battling to overcome the problem and at least save itself from loss. However, unlike other airlines, Ethiopian Airlines has been performing better and continued to be profitable during the pandemic.
Lemma Yadecha, Ethiopian Airlines International Services Managing Director, said that in the end of the budget year that ended in June Ethiopian shall met 65 percent of its performance of the pre COVID period or in 2019.
“At the end of this year, December 31, 2021, we expected that Ethiopian Airlines will close the year by 80 percent of pre COVID 19 performance, which is odd compared with others,” Lemma told Capital.
“Other airlines are struggling to meet at least 50 percent of their pre COVID performance, while our operation is on upward trajectory, contrary to others,” he added.
Agility and taping challenges as opportunity is the major success of ET, according to the International Services Managing Director, who stressed that the leadership is valiant to manage challenges.
“Despite the enterprise being owned by government, it is operating like a private company and the management and staffs are working as owners and family,” Lemma explained while showing the reason for the success of Ethiopian Airlines that has 62 destinations in Africa and flights to all the continents around the world.
When the air transportation world was hard hit, it can be recalled that ET converted some of its passenger aircrafts to transport cargos to transport personal protective equipment for COVID 19 and vaccine to different destinations while most aircrafts were grounded all over the world.
Lemma said that the passenger sector is now bouncing back while the major success is mainly attributed by cargo service.
Regarding passenger operation ET announced that it reached 55 percent of the pre COVID 19 period, while it may vary from month to month.
The International Civil Aviation Organization reported that as seat capacity fell by 50 percent in 2020, passenger totals dropped by 60 percent with just 1.8 billion passengers taking to the air during the first year of the pandemic, compared to 4.5 billion in 2019.
Annually ET used to transport 12.7 million passengers before the pandemic. “This Ethiopian year we have planned to transport 9 million passengers that is about 70 percent of 2019, a year that was pre COVID 19.”
According to him, the MRO service that is providing maintenance service for other airlines is also growing and similarly the aviation academy is playing its part to rebound ET’s revenue.
ET projects pleasant performance despite global trends
Insurers seek two-way cooperation over DBE bond
Insurers argue that despite the National Bank of Ethiopia (NBE) ordering insurers to buy 15 percent bond from the Development Bank of Ethiopia (DBE), the bank ought to replicate the same by working with private insurance firms.
A few months back, NBE imposed on insurance companies to buy 15 percent bond from the stated owned DBE from their total annual net profit.
However experts in the insurance industry argued that the bank should also work with private insurers. They claim that DBE is only engaged in business with the state giant, Ethiopian Insurance Company (EIC), which is unfair to the private insurers.
One of the insurance sector expert said that insurers shall accept the decision of NBE that ordered them to buy the bond under the directive ‘Investing in Development Bank Bond Directive No.SIB/54/2021/’, “However, on the reverse, DBE must give business for insurers who are investing on the policy bank,” experts opined.
Under article 4.1 of ‘investing in Development Bank Bond Directive No.SIB/54/2021/’ NBE ordered all insurers except the state owned EIC, stating that an insurance company shall invest an amount equal to a minimum of 15 percent of its net income in DBE Bond.
Article 4.2 of the directive says an insurance or Ethiopian reinsurance company shall invest the amount stated under article 4.1 within 90 days after the close of its financial year.
“The directive excluded the state insurers but it is the only company that works with DBE,” experts said, adding, “Since we have partnership and investment with DBE at least the policy bank should include us as an alternative service provider for its customers.”
The Bond will have a maturity period of three years and will have a payment of bond rate of at least two percent points higher than the minimum interest rate paid on saving deposit at the time of issuance. Currently, the minimum deposit rate is seven percent that means on this rate the DBE Bond maturity rate is nine percent.
The directive that becomes effective as of September 1 stated that DBE Bond shall be paid annually.
Recently, the government through NBE, a financial industry regulatory body, amended existing rules and directives or introduced new monetary policies and directive to control the galloping inflation.
The NBE Board announced that it will continue to closely monitor economic and financial developments and stands ready to utilize all available policy tools at its disposal to ensure price and financial stability consistent with its legal mandate.
After a decade, AU grand hotel inks new owner
Westin Hotels and Resorts takes over the management of the new African Union Grand Hotel with an agreement being signed with Midroc Ethiopia PLC on Friday November 12, 2021.
Officials from Midroc Ethiopia PLC inked a deal with Marriott International for the African Union Grand Hotel located adjacent the African Union headquarters in Addis Ababa to operate under its Westin Hotel brand. Starting from 2012 Westin Hotels and Resorts has been negotiating with MIDROC Ethiopia to manage the hotel when the hotel was still under construction in the compound of the headquarters of the African Union.
Jamal Ahmed, CEO of Midroc Investment Group and Yasin Munshi, Director of Lodging Development East Africa for Marriott International signed the deal.
“As we build on our long-term relationship with Marriott International, we look forward to bringing the Westin brand to Ethiopia,” remarked Jamal Ahmed, CEO of Midroc Investment Group.
Yasin Munshi, Director of Lodging Development – East Africa for Marriott International commented, “we are delighted to strengthen our relationship with Midroc Ethiopia and further enhance our footprint in Ethiopia with this landmark project.”
The Hotel was expected to launch operations staring from 2013 during the 50th anniversary of the African Union.
The hotel which has 14 stories is located in the premises of the African Union head quarter. The speed of the construction project was as a result of a loan grant of 850 million birr, by the Commercial Bank of Ethiopia. The total expense of the construction of the hotel is estimated to be about 1.2 billion birr.
The design of the hotel calls for a complex, multipurpose and standard construction that is designed for presidents, diplomats and business travelers. It is expected to include meeting rooms, suites, swimming pool and spa, restaurants and bar, grand club, multipurpose ballroom, business center and parking.
Westin Hotels and Resorts brand which will take over is an international hotel brand and an American upscale hotel chain owned by Marriott International, part of Starwood’s Hotels and Resorts Worldwide since it was acquired by Starwood in 1994. Recently Westin has focused on expanding global market, owning 250 locations in 40 countries over the world.
Marriot International has also the management of Sheraton Addis hotel with its most global brand within the Marriot portfolio which also is owned by Midroc Ethiopia.
Pre-power generation of GERD to start soon
“Ethiopia is in preparation for the pre power generation of the national flagship project, the Great Ethiopian Renaissance Dam/GERD/ within the maximum time cap of five weeks,” proclaims Sileshi Bekele /PhD/, Chief Negotiator and Advisor on Trans boundary Rivers and GERD at the office of the Prime Minister of Ethiopia.
The dam in its pre power generation is expected to generate 700 MW. As Sileshi said, the overall construction progress of the dam has now reached 82 percent.
As officials from the Ministry of Water and Energy explain, when the dam starts the first production of power it will cover 20 percent of the nation’s demand.
Financed by local sources the GERD will be capable of producing as much as 5,000 megawatts (MW) of electricity, ranking it as one of the world’s largest dams and by far Africa’s largest dam by electricity production.
Ethiopia has made the second filling in the past rainy season. The country has made a stand on equitable water use on the Abay/Nile River that is the source of the GERD.
The Grand Ethiopian Renaissance Dam (GERD) is the source of an almost decade-long diplomatic standoff between Ethiopia and downstream nations Egypt and Sudan.
Despite the downstream countries mainly Egypt expressing its concern on its water flow Ethiopia strongly reassured that the project would not have harm on others and the country does not have intention to affect others.
To tackle the concerns, the three countries, Ethiopia, Sudan and Egypt discussed for years, while the negotiation was interrupted majorly from reasons that mainly come from Egypt.
Ethiopia has also been facilitating comprehensive engagements to address the concerns of the riparian countries since the inception of the construction of the GERD.
After discussions on UN Security Council the three countries have come to the AU-led negotiations and perhaps the negotiations between Egypt, Sudan and Ethiopia are still suspended since Ethiopia completed the second filling of the GERD.
“Ethiopia has never and will never accept any mediator and will would never agree with unfair terms that seek to maintain the hydro hegemony of Egypt and Sudan,” said Sileshi, adding, “Exerting unnecessary pressure on Ethiopia by intentionally politicizing and internationalizing the matter will not make Ethiopia accept the colonial-era treaty over the Nile River.”
Ethiopia contributes more than 86 percent of water share for Abay, while the river does not provide required economic benefit.
With some cooperation and wisdom, it was initially possible that the ambitious GERD project could become both a great development project for the Ethiopian people and a model for cooperation between Ethiopia and its neighbors. Instead, the project has become a constant cause for conflict as the various actors vie for regional hegemony.
