Escalating geopolitical tensions in the Gulf region and soaring global fuel prices have created severe operational hurdles for Ethiopian Airlines, causing overall operating costs to surge by 25%. According to Ethiopian Airlines Group CEO Mesfin Tasew, ongoing conflicts in the Middle East have significantly disrupted regional logistics, directly undermining the carrier’s fuel procurement networks and pushing expenditures well beyond normal projections.

The crisis intensified dramatically following the closure of the Strait of Hormuz, which blocked the airline’s primary jet fuel import routes originating from Kuwait and triggered a localized fuel shortage in Addis Ababa.

To prevent widespread flight cancellations and maintain schedule integrity, the airline was forced to proactively procure jet fuel from alternative international markets and reroute aircraft through neighboring nations.

As the CEO noted while presenting the group’s 2025/26 performance report, while these emergency measures successfully stabilized flight operations, they generated substantial unexpected expenditures, placing heavy pressure on the company’s financial structure.

Mesfin warned that if these elevated energy prices persist throughout the new fiscal year, they will place a heavy squeeze on profit margins, even as the airline strives to maintain a resilient financial footing through swift operational adjustments.

Despite these immense external pressures and a temporary dip in passenger volumes along Gulf corridors, it was reported that the airline achieved a 20% revenue growth for the concluded fiscal year.

According to the group’s report, Ethiopian Airlines generated $9.1 billion in revenue, reflecting a significant increase compared to the $7.2 billion recorded in the previous fiscal year. Mesfin Tasew emphasized that while operating expenses rose quickly due to fuel inflation, strong overall revenue growth has kept the airline firmly profitable.

Building on this robust foundation, the company has rolled out an expansive growth strategy for the current fiscal year, setting an ambitious target to achieve $10 billion in revenue.

To navigate volatile global conditions and sustain its upward trajectory, the airline is advancing several key initiatives, including increasing total passenger volume to 23 million, launching six new international destinations, integrating 17 new aircraft into active service, and expanding cargo capacity by 11% alongside a 14% increase in cargo revenue.

The planned acquisition of Canada’s Allied Gold Corporation by China’s Zijin Gold International has officially been terminated after both companies concluded that the conditions required to complete the transaction could not be met by the July 29 deadline or within a reasonable timeframe.

Instead, the two companies have agreed on a strategic investment under which Zijin Gold will invest approximately US$295 million in Allied Gold through a private placement.

Under the agreement, Zijin Gold will acquire approximately 12.8 million common shares at C$32.55 per share, generating gross proceeds of about US$295 million (C$417 million). Upon completion of the transaction, Zijin Gold will own approximately 9.2 percent of Allied Gold’s outstanding shares. The investment remains subject to approval by the Toronto Stock Exchange and the New York Stock Exchange and is expected to close on or around August 10, 2026.

Allied Gold said the proceeds will be used to advance its growth strategy, including operational optimization, the completion and ramp-up of the Kurmuk Gold Mine in Ethiopia, the phased expansion of the Sadiola mine in Mali, increased production at its Côte d’Ivoire operations, and exploration across its asset portfolio. The company added that the Kurmuk Mine is expected to begin operations in August, with first gold production anticipated within weeks.

The latest development marks a significant shift from the companies’ original agreement announced in January, under which Zijin Gold had offered to acquire Allied Gold in an all-cash transaction valued at approximately US$4 billion, or C$44 per share.

The takeover had secured regulatory approvals from the jurisdictions where Allied Gold operates, including Ethiopia. However, the transaction faced prolonged delays in obtaining the necessary approvals in China. Although neither the companies nor Chinese authorities publicly disclosed the specific reasons for the delay, Capital has learned that the regulatory process in China ultimately prevented the deal from reaching completion before the agreed deadline.

While the acquisition has now been abandoned, the strategic investment preserves a partnership between the two companies and provides Allied Gold with fresh capital to advance its expansion projects across Africa.