Ethiopian Airlines inks $30m deal with Zambia to revive national airline

State-owned Zambia Airways went into liquidation in 1994.

Ethiopian Airlines aeroplane at the Jomo Kenyatta International in Nairobi. FILE PHOTO | NMG 

IN SUMMARY

  • Ethiopian Airlines said in January it had signed an agreement with the Zambian government to relaunch Zambia Airways.
  • State-owned Zambia Airways went into liquidation in 1994.
  • The Ethiopian state-owned carrier has outpaced regional competitors Kenya Airways #ticker:KQ and South African Airways to become Africa’s largest airline by revenue and profit.

Advertisement

Lusaka

Ethiopian Airlines has signed a shareholding agreement with Zambia’s main development agency to relaunch the southern African country’s flag carrier at an initial cost of $30 million (Sh3 billion).

The Ethiopian state-owned carrier has outpaced regional competitors Kenya Airways #ticker:KQ and South African Airways to become Africa’s largest airline by revenue and profit, and has been buying shares in other African airlines to gain a competitive advantage over rivals such as those in the Gulf.

Under the plan, Zambia Airways, being revived more than two decades after it was shut down, would operate 12 planes by 2028, Ethiopian Airlines said in a joint statement with Zambia’s state-owned Industrial Development Corporation (IDC).

READ: Ethiopian Airlines frontrunner in tender for planned Nigerian airline

READ: Ethiopian Airlines to fly seafood from Norway to China

READ: Comeback African airlines will need more than shiny new planes to thrive

Own 45pc

Ethiopian Airlines will own 45 per cent of the revamped Zambian airline, and Zambia 55 per cent, the statement said.

“The initial investment as we start up the national carrier will be $30 million. Obviously, as we operate the airline, we will facilitate the financing necessary to support its growth,” it said.

Ethiopian Airlines said in January it had signed an agreement with the Zambian government to relaunch Zambia Airways.

Zambia Airways will launch local and regional routes this year while intercontinental routes, including Europe, the Middle East and Asia, will be added in the near future, it said.

State-owned Zambia Airways went into liquidation in 1994. The privately-owned Zambian Airways then emerged as the country’s main carrier with flights to other major hubs in southern Africa, but it suspended operations in 2009.

Ethiopian Airlines operates and manages Malawi Airlines through a deal signed in 2013.

Joint ventures

In May, the airline said it was in talks with Chad, Djibouti, Equatorial Guinea and Guinea to set up carriers through joint ventures. It also aimed to create a new airline in Mozambique that it will fully own.

Ethiopia said in June it would open Ethiopian Airlines and its state-run telecoms monopoly to private domestic and foreign investment in a major policy shift that will loosen the state’s grip on the economy.

More From Business Daily
This page might use cookies if your analytics vendor requires them. Accept