How Ethiopian Airlines’ Agility Saw It Through COVID With No Bailout

Ethiopian Airlines is one of the biggest international carriers and has been hit hard by the COVID pandemic. Despite this, it has not received, nor does it hope to receive any form of bailout. Simple Flying caught up with acting Chief Operating Officer Esayas WoldeMariam to find out how the airline is keeping its head above water.

No bailout for Ethiopian

The COVID crisis has seen airlines all over the world crying out for support, as an unprecedented downturn in travel demand swings every carrier to huge losses. Some airlines have secured record bailouts from their governments, while those who haven’t are on the brink of collapse.

To date, Ethiopian has received no bailout; neither is it hopeful of getting this type of support. Simple Flying asked acting Chief Operating Officer Esayas WoldeMariam whether he thought the airline could survive on its own merit. He told us,

“Many of the European and American carriers have got a very rich Uncle Sam who is supplying them with these funds. But for us, we do not have that kind of a luxury. So, we have to run for our own life.

“So far, we have not pursued anything of the sort, because we’re getting by with cargo, with repatriation flights and with reopening the passenger flights. We are making ends meet and getting by, we are paying all our overhead costs and fixed costs and all our other commitments.

“We have not defaulted on any payment so far.”

It’s impressive to see an airline as big and as international as Ethiopian not yet struggling to make ends meet. Esayas told us he puts this down to the natural agility of Ethiopian Airlines, and its ability to turn its hand to other activities to keep the revenue flowing. He said,

“Number one is our agility. [Ethiopian is] not just an airline, it’s a complete aviator. We have a lot of strategic business units like ground handling, catering, repair, maintenance and overhaul, our aviation academy, full cargo, a full international passenger network … So when one line of business is failing, it is easy for us to switch to the other because, by strategy, we have been well situated with a diversified business.”

Stay informed: Sign up for our daily aviation news digest.

Counting on cargo

Early on in the pandemic, Ethiopian noted the huge slump in cargo capacity flying the world’s routes. The lack of passenger planes operating stripped almost half the total cargo capacity out of the market, and this didn’t go unnoticed by the Addis Ababa based airline. Esayas told us,

“When that [capacity] was reduced, and the need for conveyance of PPE was surging, then we had to embark. Necessity pushed us into converting 25 aircraft plus we used our existing cargo aircraft, 12 of them, so altogether we were working with about 37 of them.”

Ethiopian converted 25 of its 777s for cargo, including stripping out the passenger seats to give cargo capacity both above and below the wing. In April, despite COVID costing the airline half a billion dollars, it said it could survive on cargo alone until July.

Now, as demand slowly picks up, some of those 777s are having their seats put back in. But this willingness to rapidly pivot to cargo has kept Ethiopian’s head above water through the worst of the crisis.

Regular repatriation

Ethiopian has also been busy working on repatriation flights. Since the very start of the crisis, the airline has been a top choice for governments to get their people home. Ethiopian has welcomed every opportunity with open arms, despite the challenging nature of organizing such flights. Esayas explained,

“It is all irregular operations. It is operationally intensive, supervision intensive, it’s very hands on and requires a lot of coordination. There are airports which we’re not used to flying in the past within our scheduled network … It’s quite a circus, but that’s part of the challenge. Which makes it more adventurous.”

We asked Esayas why Ethiopian is such a popular choice for repatriation services. He told us,

“When repatriation emerges, the early bird is catching the fat worm. The fact that we have been responding quickly, and we have competitive prices, we have a high standard of hygiene and protection, which is stipulated by CDC and World Health. So all this put together has made us a better choice.”

Throughout the crisis, Ethiopian has been working hard and working smart. The airline is in an incredible position to weather the crisis, without the need for the level of bailout we’ve seen in other companies.