Ethiopian Airlines has signed a shareholder agreement with Zambia’s Industrial Development agency to resurrect Zambia’s national air carrier, 24 years after it was liquidated.
The agreement between both parties was signed in January 2018 but was made public on Tuesday this week. The agreement will see Ethiopian Airlines own a 45 percent share of the revamped airline, while Zambia will own 55 percent of it. The agreement also mandates that Zambia Airways will be operating 12 airplanes by 2028. Zambia Airways will begin operations this year with flights to local and regional locations, while it will add intercontinental flights to Europe, Asia, and the Middle East in the near future.
Ethiopian Airlines’ investment in the new venture is $30 million and is part of a chain of ventures Africa’s biggest airline is investing in around the continent. Ethiopian Airlines is currently in talks with 4 other airlines on the continent, in a bid to make the airline more pan-African. It has finalized agreements for a 49 percent stake in Guinea’s national airline, which was also recently relaunched after 15 years in the doldrums. The same type of deal has been signed in Chad, Mozambique, and Equatorial Guinea.
“Guinea Airlines is preparing to start flights to neighboring and regional countries soon, Chad Airlines will start work on October 1, Mozambique Airlines will start operations by the end of the year and at the request of Equatorial Guinea President Teodoro Obiang, ET has taken over complete management of the country’s national air carrier,” Ethiopian Airways CEO Tewolde Gebremariam said, while announcing the deals on Tuesday to the AFP.
Ethiopian Airways is already Africa’s biggest African air operator, having transported more than 10 million passengers at the close of its fiscal year in July of this year. Gebremariam says the airline is searching for closer ties with more air carriers on the continent, so as “to create a feeling that it is an “African airline”. These agreements are tailored towards the African Union’s Single African Air Transport Market Initiative (SAATM) that was launched in January 2018 by 23 African countries.
The SAATM has the potential of providing jobs for Africans, promoting trade between countries in Africa, and the free movement of people, in line with the African Continental Free Trade agreement, which also advocates for the free movement of goods, services, and capital. The SAATM will also lead to a reduction of flight ticket prices for Africans willing to fly to other countries on the continent, resulting in more tourism revenues for these countries.
Ethiopian Airlines already has stakes in air carriers in Malawi and Togo and is also hopeful that it would purchase shares in newly-launched Nigeria’s state Airline, Nigeria Air. Ethiopia’s government in June disclosed its plans to open up some of its government-owned enterprises, including Ethiopian Airlines, to foreign investment.