Ethiopian Air in Talks to Help Nigeria Create a Flag-Carrier

(Bloomberg) -- Ethiopian Airlines Enterprise, Africa’s biggest airline, said it’s in discussions to back the Nigerian government’s plans for a new national carrier.

Tewolde GebreMariam, Ethiopian’s chief executive officer, will hold talks with a Nigerian minister about the proposal on Tuesday at the Farnborough air show in England, he said in an interview. Nigeria said this month that a new airline would begin operations this year, with the name to be revealed at the expo.

Africa’s most populous nation has struggled to support a viable home-grown airline for decades, with a succession of carriers collapsing or slashing routes. That’s left the oil-rich country dependent on services provided mainly by European and Persian Gulf carriers for trips beyond the region.

Ethiopian Air, by contrast, has become Africa’s only consistently profitable carrier by turning Addis Ababa into a crossroads for travel around the continent and beyond, replicating the hub model of Persian Gulf carriers. The network features about 70 global cities and almost 60 across Africa.

Ethiopian Air already owns stakes in Malawi Airlines and Togo-based Asky Airlines and aims to secure equity holdings in new carriers in Zambia, Chad, Mozambique and Guinea by the end of the year while helping to manage existing operators in Equatorial Guinea and Democratic Republic of Congo.

Earlier Tuesday the government announced plans for the company to buy a 20 percent stake in Eritrea Airlines as part of a new peace deal, with flights between the neighboring states starting Wednesday.

Qatar Role?

Tewolde, who spoke in London, said he expects to face competition over the Nigerian project from Qatar Airways, which has stakes in carriers including British Airways owner IAG SA and Latam Airlines Group SA, the biggest South American operator. Qatar CEO Akbar Al Baker, in London for the same Skytrax World Airline Awards event, told Bloomberg separately that isn’t the case.

Nigeria said last week that its planned national carrier would be unveiled July 18. The airline will be run as a public-private partnership and should become profitable in three years, according to the government. Aviation Minister Hadi Sirika tweeted Tuesday from Farnborough that he’d held talks on sourcing jets from Airbus SE and planned to meet with Boeing Co. and other suppliers.

Former flag-carrier Nigeria Airways collapsed in 2003, with successor Air Nigeria -- founded as a joint venture with Richard Branson’s Virgin Group -- folding in 2012. Private operator Arik Air was taken over by Asset Management Corp. of Nigeria last year, leading long-haul flights to be suspended.

Ethiopian Air is separately working on a repeat order for the Boeing 787, Tewolde said, with a purchase possible some time this year. The deal could be for the 787-9 variant and would likely double the size of the existing fleet.

The carrier is also looking at the Airbus A350-1000 and seeking to evaluate whether the model would perform sufficiently well out of Addis Ababa, which combines a hot climate with an altitude of close to 8,000 feet, making it a testing location for aircraft. It already operates the smaller A350-900 plane.

The Boeing 777X is also in the running but could be too pricey, Tewolde said. The CEO has said that plans to establish a fleet of smaller jetliners -- either Embraer SA’s E195 or the Airbus A220 -- have been shelved as passenger figures suggest bigger narrow-bodies would be a better fit.

©2018 Bloomberg L.P.