Ethiopian Airlines bullish about growth in 2022 with strong air cargo demand

The Omicron variant, though, is a 'challenge' to airlines as governments respond with unco-ordinated travel restrictions, chief executive says

A shipment of Johnson & Johnson's coronavirus vaccines which arrived under the Covax scheme is handled by an Ethiopian Airlines Cargo terminal worker at Bole International Airport in Addis Ababa, Ethiopia. ReutersShow less

Ethiopian Airlines expects 2022 to be a better year for the aviation industry than 2021, buoyed by strong demand for air cargo, but it said that governments' unco-ordinated response to the emergence of the Omicron coronavirus variant was hindering recovery.

The airline is currently operating at 70 per cent of its pre-pandemic capacity and could recover 80 to 100 per cent of its pre-crisis capacity during this year, Tewolde Gebremariam, chief executive of Ethiopian Airlines, said in a video conference during the Travel & Connectivity Week at Expo 2020 Dubai on Tuesday.

"2022 will be much better than 2021 because we see consecutive growth," he said. "At Ethiopian, we're now at 70 per cent capacity, so we may go up to 80, 90 or even 100 per cent … Most important for us has always been cargo."

Air cargo has been a bright spot for the aviation industry during the past two years of the pandemic that has hammered passenger travel demand.

Freight rates are increasing due to a surge in e-commerce and pandemic-related supply chain bottlenecks driving demand for services, providing a lifeline to airlines whose revenue withered during the crisis.

Ethiopian Airlines, Africa's biggest carrier, managed the coronavirus crisis with its own financing and without bailouts, and gave its employees salary rises and bonuses, Mr Gebremariam said.

"We're cash-positive, we're profitable," he said. "For us Ethiopian Airlines, the cargo business is strong and I would say it is a breadwinner for the group."

Despite the booming cargo business and expectations of a brighter outlook for airlines in 2022, Mr Gebremariam said that the industry is still not near a full recovery from the coronavirus crisis and remains "far behind" pre-pandemic levels in most performance metrics, particularly in terms of passenger traffic.

Governments have responded to the pandemic in an "unco-ordinated" way with little alignment on travel requirements, which has posed challenges for passengers, he said.

"The tourism part of travel is not yet recovering as much as expected," he said. "Unfortunately, many countries are still closing their borders."

Government reactions to the surges in waves of coronavirus variants are hurting the airline industry's fragile recovery, requiring a "global formula" for facilitating air travel, he said.

"Unfortunately, various countries are responding in a different, fragmented, unco-ordinated way. The reactions of various governments have become a bottleneck or hindrance for the slow recovery we’re seeing," Mr Gebremariam said.

"Delta [variant] did its own damage last year and now Omicron is a challenge."

Ethiopian Airlines had not flown passengers to Dubai in three to four weeks, Mr Gebremariam said.

The emirate, a Middle East hub for tourism and business, has prohibited travellers who have recently been in Ethiopia and several other African countries from entering or transiting because of high case numbers of the Omicron strain of the coronavirus.

Last month, Ethiopian Airlines said it will resume flying Boeing 737 Max jets in February, three years after a crash that killed 157 people prompted a global grounding of the aircraft.