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Ethiopian Airlines Ramps up Cargo Investment for African E-commerce Hub

Africa largest airline may order five Boeing 777 freighters Ethiopian looking to capitalize on pandemic e-commerce boom

Addis Ababa, January 24, 2022 (FBC) – Ethiopian  Airlines Group will ramp up investment in cargo services and infrastructure and is looking to become a logistics hub for Africa’s growing e-commerce market.

The continent’s largest airline is considering an order for about five Boeing Co. 777 freighters and may also take upcoming Airbus SE A350s, Chief Executive Officer Tewolde GebreMariam said in an interview.

The carrier is also looking to expand its cargo operations in Addis Ababa and hire new people, he said.

“We are building a new e-commerce warehouse in the cargo terminal,” he said in an interview from the U.S. “E-commerce is growing especially between China and Africa and we want to continue the leadership,” he said.

While Ethiopian has long been a major operator in freight, the Covid-19 pandemic has elevated demand as stay-at-home rules triggered a boom in online retail. Carrying goods during the past two years helped many airlines stay afloat, as border closures hammered demand for air travel.

China is a major investor in Africa and Safaricom Plc, Kenya’s biggest mobile operator, has a partnership with a unit of internet group Alibaba Group Holdings Ltd. to facilitate electronic payments.

Cargo now accounts for half of Ethiopian’s revenue, compared with about 15pct before the coronavirus, Tewolde said. That figure may drop to 30pct as passenger services recover, which he said is likely to accelerate when China opens up in the second half of 2022.

“Cargo is the breadwinner, that’s how we remain profitable and cash positive,” Tewolde said. “The passenger side is still suffering. We are about 70pct of pre-Covid capacity.”

Ethiopian is finalizing the creation of new airline in the Democratic Republic of Congo, and will own 49pct of the company. It has similar partnerships with the governments of Zambia, Chad and Malawi.

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