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Ethiopian Airlines' profits soar
By Kirubel Tadesse
Ethiopian Airlines has pocketed a net profit of 515 million birr during the first six months of the current fiscal year, a preliminary report has revealed. Staying muscular in the face of a global economic recession and stiff competition in the aviation sector, Ethiopian airlines managed to increase its mid year profits by nine per cent compared to the same period last year.
However, the profits progress was significantly lower than the airline's operating revenues, which have picked up by nearly 55 per cent. The airline collected 6.7 billion birr in operating revenues during the first six months; July to December last year.
One industry expert explained to Capital that such unproportionality may have been caused due to mounting expenses.
"Though now lowered, high fuel prices were witnessed during the first few months of the budget year and it is likely the major cause for the exaggerated expenditures Ethiopian endured that led to revenues and profits to disparity," the expert said.
The airline attributed the revenue progress to the increase of flight frequency, and the introduction of new international flights. The flag carrier leased one B757 passenger aircraft. Cargo revenues, and strategic cost reductions and marketing strategies have also created profit for the state owned company.
Ethiopian airlines transported 1.5 million passengers during the period, also a staggering improvement, as the global economic slowdown is slashing demands of passengers from most of airlines. The improvement is by 19 per cent in comparison to that of the first six months of the previous year. The airline transported 2.5 million passengers during the entire last budget year, hinting that this year's number, 1.5 million in six months, could lead to a record high figure at the completion of the year.
More good news is that despite the exports and exports shrinkage that hit the nation, Ethiopian managed to double the freight it carries. 55 thousand tons of freight, a 101 per cent increase, a staggering advancement from the same period last year, was carried by the airline.
Ethiopian had two new MD-11 freighters it purchased at its disposal during the period in review to accommodate demand. The augmentation in cargo revenues is one of the key factors for the airline's profits.
"The first half of 2008/09 was another successful period for the national carrier despite the numerous challenges we had to deal with, and today Ethiopian remains optimistic that its performance will be sustained going forward, considering the strategic cost reduction efforts and improved operating procedures we have put in place," Girma Wake, CEO of Ethiopian Airlines commented about his airline's strong performance.
To advance its often criticized local operations, the airline has purchased eight Bombardier Q-400 NextGen turboprop aircraft during the first six months of the current budget year.
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this comes with the hard working employees sacrifying there well deserved but low weage payment.If the managment decide to pay them as their compitators, the story might be slightly different.Anyways, well done to ET!
Why don’t they post the profit in US $. I am sure a big portion of this profit is to be attributed the recent devaluation of Birr from 1 USD= 9 ETB to 1 USD= 11 ETB. don’t play such a kido game. Taking the devaluation in to consideration the actual profit would be less by 50M ETB.
Good job all Airline crews, mangement, Girma wake and FM Siyoum Mesfin.
keep up the good job.
Sat, why you guys always be negative. We Ethiopian have more similarties than differances. Please try to be positive.
Ethiopian Airlines was and still is a profitable organization. One thing Girma Wake should not forget is to start paying employees a decent wage. We read so many claims of profits and it is a result of Ethiopians dedicated employees. In the past decade Ethiopian employees have been and still are being lured to Emirates and Etihad. This two airlines pay decent wages and their airplanes are equipped with cabin crew rest area with full fledged bed, flat/plasma screen TV and music. Take good care of your employees and customers and Ethiopian will be even more successful.
Ethiopian Airlines is always generating profit from the cheap labor. Let them pay their employees a reasonable salary ( at least equivalent to Kenya Airways) and we will see if the company will still be profitable. Given the recent 22% devaluation, the profit they posted here is a bit exggerated, it has to be chopped by minimum of 20%, not to mention others factors (like the inflation rate) .
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