The performance of Ethiopian Airlines in the 2006/07 fiscal year was rather a glass half full: although its annual profit fell by four per cent (129 million Br) compared to the previous years, Girma Wake, chief executive officer, has a reason to smile about the national carrier, according to industry observers. 

While many in the aviation industry suffered a decline in their revenues, Ethiopian has registered close to seven billion Birr in revenues, representing an increase of 28pc from the previous year. This is also an achievement much closer to its five-year projection of reaching a one billion dollar revenue benchmark in 2010. 

The reason for the decline in net profit was attributed to an increase in global fuel prices that cost the airline an additional 304 million Br compared to original projections, Girma told the media on Thursday, August 9, 2007, at the Hilton.

“Profits were lower because fuel prices were much higher than we expected,” said Girma.

Total fuel expenditure claimed 39pc of Ethiopian’s 6.7 billion Br operation costs last year in order to run the 25 planes that have transported its record number of passengers, 1.5 million. Nevertheless, the national carrier had to lease several aircrafts last year in its bid to meet demand on its route expansion.
 

“The focus now is to expand our routes and get international visibility, whether or not the destinations make money now,” said a veteran of the company. “It is what was recommended by the international consultant.” Ernst & Young conducted a strategic study for Ethiopian a few years ago in a bid to make the airline an internationally competitive firm. Acquiring brand new aircrafts is part of the recommendation; thus Ethiopian will be the first airline in Africa to receive Boeing 787 Dreamliner aircrafts in December 2007.

CEO Girma hopes the arrival of these aircrafts will spare the national airline from leasing aircrafts, and thus gross a profit of 448 million Br in 2008/09, an increase of 106pc.