Feb. 7 (Bloomberg) -- Ethiopian Airlines Enterprise said it will locate its fourth hub in the Democratic Republic of Congo as Africa’s No. 2 carrier seeks to tap Chinese economic links and fill long-haul flights to destinations such as Brazil.
Ethiopian Airlines is negotiating with the Congolese government and could agree terms for a startup carrier based in Kinshasa later this year, Chief Executive Officer Tewolde GebreMariam said yesterday in an interview in London.
The DRC’s population of more than 65 million people, coupled with natural resources estimated to be worth $17 trillion make the country the ideal location for a central African base, according to the CEO. In addition to Addis Ababa, Ethiopian has also built bases in Togo in the west and Malawi in the south as it vies with South African Airways and Kenya Airways Ltd. to build a pan-African network.
“The Congo is a large country and a large market and while peace has been a problem there seems to be a better situation developing,” GebreMariam said. “We think it’s going to attract a lot of foreign direct investment, and it’s right in the middle of central Africa.”
While the CEO expects to face competition from African peers, as well as outside operators including Brussels Airlines, which has a subsidiary in the Congo, those carriers don’t have such good connectivity, he said.
Ethiopian Airlines offers 28 flights a week from China, serving Beijing, Shanghai, Guangzhou and Hong Kong, with its secondary-hub model providing dozens of additional links to African cities that carriers from the Asian nation have no plans to directly serve.
For long-haul flights the bases will also allow for “dual hubbing,” with services from Addis Ababa to New York via Togo, Sao Paulo and Rio de Janeiro via Kinshasa and even Australia via Malawi, GebreMariam said.
The Congo hub would also serve the mostly oil-rich nations of the Central African Economic and Monetary Community or Cemac -- the neighboring Republic of Congo, Gabon, Cameroon, Chad, the Central African Republic and Equatorial Guinea -- he said.
Ethiopian Airlines’ foreign shareholdings are limited to minority stakes because of ownership restrictions, and Malawi’s government plan to sell a 51 percent holding in Malawi Airlines would involve a transaction with local investors, the CEO said. Ethiopian has a 49 percent stake in the carrier.
The airline is looking at adding 10 to 20 single-aisle planes from Airbus Group, Boeing Co. or Bombardier Inc., and is examining the Boeing 777X and Airbus A350 wide-bodies, the CEO said Jan. 20. Fourteen A350s have already been ordered to swell a 62-strong fleet that features five Boeing 787 Dreamliners.
New destinations under consideration include Los Angeles, Madrid and Jakarta, with Tokyo, Shanghai and Vienna already being added to the network this summer.
Ethiopian Airlines is also expanding a cargo business that already ranks as the biggest in Africa, employing 1,000 people, with new services planned to Moscow, Singapore, Bangkok and Shanghai, GebreMariam said.
The carrier has a freighter fleet comprising two 777s, two Boeing MD-11s and two single-aisle 757s, and will add two more 777s this year and two in 2015, while the CEO’s Vision 2025 strategy envisions 16 cargo planes by that date able to carry 820,000 tons annually, versus about 180,000 today.
Goods transported include mining, oil and gas equipment from Europe and a variety of industrial goods from China, with exports Ethiopian roses sent to the world’s biggest flower market in Amsterdam on two dedicated flights per day.
“We don’t see an African carrier that has a focused cargo strategy like us,” GebreMariam said.
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