has issued requests for proposals (RFPs) to and to fulfill an order of about 15 re-engined single aisle aircraft to supplement the carrier’s current narrowbody fleet of NGs and .
The order is part of Ethiopian’s Vision 2025 strategy plan, and will boost the airline’s narrowbody fleet to about 27 aircraft, CEO Tewolde Gebremariam tells Aviation Week.
The short-haul RFPs come as Ethiopian takes delivery of its first-8. The aircraft arrived at its Addis Ababa base Aug. 17 and was deployed the following evening on its first scheduled service, a nonstop flight to Dubai.
Ethiopian for the next several weeks plans to use the aircraft within Africa, to destinations including Johannesburg and Nairobi, while it waits for a second 787 to be delivered. These two aircraft will then be assigned to the airline’sroute sometime in September.
The airline is only the third to take the 787 afterand . Ethiopian, which has 10 787-8s on order, plans to operate a total of five of these widebodies before the end of the year. Delivery of the 787 is three years late because of Boeing’s production problems.
Once the fleet has grown, the 787s will mainly be used on European and some Asian routes that may include new destinations such as Shanghai and Chonquing in China, says Gebremariam. And while the 787 will eventually replace the carrier’s fleet of 12, most of the 767s will remain until 2017 or 2018. “We need them to keep our growth,” says the airline’s CEO.
Revenues for Ethiopian’s fiscal 2011/12, which ended in June, grew 37% year-on-year and the company expects similar improvements this year. The airline’s 2025 plan envisions a fleet of 120 aircraft by the end of the initiative, around three times as many as today, and for annual revenues to grow sixfold to $10 billion.
Ethiopian plans to serve 90 destinations carrying 18 million passengers by 2025. The plan also calls for the carrier to be split into seven business units.
The 787s and re-engined narrowbodies are only part of the fleet expansion, and Ethiopian also has firm orders for 12 Airbus-900s, which it intends to use alongside its -200LR fleet. “The 777 and the A350 will be used for ultra long-haul routes. They complement each other,” says Gebremariam, adding that the 777s will help expand the airline’s U.S. network to the west coast, where it targets San Francisco as a new destination.
As with the 787s, a program delay will affect Ethiopian’s delivery schedule, and Gebremariam acknowledges that “Airbus is telling us they will arrive a year later” than the 2017 slots initially planned.
Ethiopian has emerged as one of Africa’s leading long-haul carriers along with Egyptair,and South African Airways (SAA), and its Bole International Airport hub currently has a 65% connecting traffic share, among the highest in the industry.
Within Africa, its exposure in the northern part of the continent is still limited, because trade links have historically been weaker. But Gebremariam says that they are now developing and Ethiopian also sees opportunities to fly Chinese investors to destinations in the region via Addis Ababa. Chinese business traffic has already been one of the key drivers behind the growth of its Asian routes.
But some aspects of Ethiopian’s strategy have fared less well, notably an initiative withmembers Egyptair and SAA to develop routes across Africa. The original plan called for the establishment of several joint ventures across the continent, but the program has now focused on developing Togo’s ASKY Airlines, itself a joint venture between Ethiopian and local investors.
While currently serving Togo, Ethiopian wants to expand ASKY to other countries. Ghana is the next target, but Gebremariam notes that “we are waiting for the airport renovation to be completed in Accra.” Ethiopian’s CEO says Accra was picked because many Star Alliance carriers serve the city and ASKY could provide intra-African feed, much more so than it currently does at Togo’s Lome International Airport.
Gebremariam also hopes negotiations with SAA and Egyptair will lead to both of them taking minority stakes in ASKY, but no firm agreement has been reached. Gebremariam notes that “ASKY’s growth and load factors are good, but profitability is still a challenge.”