ROUTES AFRICA: Ethiopian Invests in new Malawi Airlines Venture

Ethiopian Airlines has become the strategic partner of the new Malawi Airlines in a deal that was formalised in the immediate aftermath of this year’s Routes Africa forum in Uganda, which brought airlines, airports and tourism authorities from across the Continent and other parts of the world to discuss air transport connectivity across Africa.

One of the discussion points was enhancing connectivity across the Continent and this move from the East African hub carrier is part of its Ethiopian Vision 2025 strategic roadmap of setting up multiple hubs in Africa.  Through this strategic partnership with Malawia Airlines, Lilongwe will become Ethiopian third hub on the continent after its main hub in Addis Ababa and its West Africa in Lomé.

Under the terms of the agreement, Ethiopian Airlines will hold a 49 per cent shareholding in the start-up carrier with the remaining 51 per cent equity in the hands of the Malawian Government and Malawian private investors.  The formal shareholder agreement was signed between H.E. Dr. Cornelius Mwalwanda, Deputy Minister of Finance of the Government of the Republic of Malawi and Ato Tewolde Gebremariam, Chief Executive Officer of Ethiopian in Lilongwe on July 11, 2013 but ahead of that Girma Shiferaw, Director of Alliances & Network Planning, Ethiopian Airlines outlined more information on the carrier’s strategy to delegates at Routes Africa.

“Today, Africa is booming and, with the economic growth of our continent, demand for air travel is also growing at a much faster pace than the global average.  This growing demand and the uneven competition from foreign carriers, which currently dominate the African market, cannot be overcome by one single African airline. For indigenous African airlines to succeed and get their fare share of the market, partnerships between African airlines are a must,” said Shiferaw.

Ethiopian Airlines’ CEO, Tewolde Gebremariam, describes this deal to establish Malawi Airlines as a model for future cooperation across Africa, a something the carrier has prior experience through the establishment of Togoloese regional airline, ASKY, a business he says “which has been quite successful”.

“This new agreement we have just signed with the Government of Malawi is a model for the type of African cooperation that is needed in the 21st century. It is a win-win partnership aimed at enabling the success of African aviation in a capital intensive, skill-driven and highly competitive industry,” added Gebremariam.

Through this strategic partnership, Ethiopian and the newly formed Malawi Airlines are expected to offer harmonised flight schedules so as to provide seamless and best connectivity options for travellers within, to and from the Southern Africa region.  In the table below we highlight the largest international O&D markets from Malawi’s main gateway, Kamuzu International Airport, which serves the capital Lilongwe.

SCHEDULED INTERNATIONAL PASSENGER DEMAND FROM LILONGWE (bi-directional O&D passengers; 2012)

Rank

Destination

Estimated O&D Passengers

% Share

1

Johannesburg (JNB)

41,085

19.7 %

2

Lusaka (LUN)

35,253

16.9 %

3

London (LHR)

18,482

8.9 %

4

Nairobi (NBO)

16,147

7.8 %

5

Mumbai (BOM)

13,330

6.4 %

6

Dubai (DXB)

6,955

3.3 %

7

Dar es Salaam (DAR)

6,699

3.2 %

8

Addis Ababa (ADD)

5,888

2.8 %

9

Harare (HRE)

5,332

2.6 %

10

Cape Town (CPT)

3,766

1.8 %

TOTAL

208,096

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