Apr 27, 2015

Ethiopian Airlines to receive two cargo planes this fall

Tewolde Gebremariam, CEO

Ethiopian Airlines (ETH) kicked off the Narita-Hong Kong- Addis Ababa service using a B787 aircraft on April 22. To commemorate the event, Tewolde Gebremariam, its CEO, came to Japan on April 23 and held a press conference in Tokyo on the next day, where he talked about his company's business overview, future expansions and other matters. With regard to cargoes, expansion at the cargo terminal in Addis Ababa is advancing in two stages, and after two years, its cargo handling capacity will balloon by 1.2 million tons per annum. After the press briefing, Gebremariam said that, "We are slated to take delivery of the two B777-200F aircraft units we ordered - one each in October and November," adding that, "We hope to offer cargo services to Tokyo, New York and other North American destinations in the future."

Gebremariam talked about the launch of ETH's first Japan flight to Narita, saying that, "We have long been worried that we lacked flights to Japan, the world's third largest economy" and "We probed into how Japan services ought to be in the past 20 years. Having our first direct flight to Narita yesterday was a moment of thrill for us." ETH initially planned to kick off its Narita flights in December last year, but it had to move the start of its operations in the lane owing to such factors as the decline in travel demand brought about by the Ebola hemorrhagic fever epidemic.

Salient points made by Gebremariam at the press briefing are as follows.

*We are an airline company that drastically grew in the past 10 years. We own 80 aircrafts, eight of which are dedicated to hauling cargoes. In terms of cargo handling volume, we are the largest airline company in Africa. We fly to 85 cities in five continents other than Australia. We undertake all operations on our own, up to crewing, marketing, MRO and employee training. Under our medium-term management plan "Vision 2025," we will continue to boost our passenger/cargo business, MRO and training business.

*With regard to cargoes, we promote investments in infrastructures. The expansion of the cargo terminal at Addis Ababa is divided into two stages. Under Phases 1 and 2, we will boost the handling capacity of the terminal by 600,000 tons in each phase, ultimately reinforcing its processing capacity by 1.2 million tons per annum. Expansion under Phase 1 has already begun and is now about 40% complete. Phase 1 is scheduled to be completed in 2016 and soon after that, we will embark on Phase 2, under which we aim to complete all process within the next two years. The current cargo terminal can handle about 200,000 tons of cargoes annually. Now if the expansion works are completed, its scale will be close to that of Hong Kong (which handled around 4.4 million tons of cargoes in 2014).

*Cargo demand that we anticipate in the Narita-Hong Kong-Addis Ababa route will be fresh produce, flowers and other cargoes from Ethiopia. In particular, Ethiopia is famous in the world for its roses. This morning, I had a meeting with Japanese flower importers and they showed interest. We also project a demand for ex-Japan cargoes such as industrial products related to high-tech industries, and automotive cargoes.

*We are also exerting effort into the transport of air cargoes using the cold chain. About one-third of our existing cargo terminal is a temperature-controlled facility. In Asia, we currently operate B777 aircrafts for cargo flights to Hong Kong, and we have a long track record in carrying Hong Kong-bound flower exports. We will also focus on life science/pharmaceutical industry-related items originating from Japan, the U.S. and Europe.

*For the future, we think it would be best if we can reinforce and turn our Narita flight into a daily service, but we will decide on this while monitoring the right timing in and reaction from the market. If we get hold of interests and slots, then we are also interested in flights to Haneda.

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