Plans by Africa’s fastest-growing carrier, Ethiopian Airlines, to double its size by 2025 have received a major boost in the form of a $159-million loan from the African Development Bank (AfDB) to fund its fleet expansion efforts.
The loan, which is backed by the African Trade Insurance Agency (ATI), will enable the airline to buy an Airbus A350-900 jet.
The fleet acquisition is part of the airline’s aggressive expansion strategy, aimed at growing its fleet and increasing yearly revenue to $10-billion in the next decade.
The transaction is the first to be covered by the ATI since Ethiopia formally became a member in 2016.
“Through its first transaction in Ethiopia, the ATI has demonstrated its technical capability, competitive pricing and client responsiveness to deliver the aircraft on time and within a short turnaround time,” says AfDB director-general: East Africa Gabriel Negatu.
The loan gives Ethiopian Airlines the financial muscle to drive its ambitious expansion programme, which is geared towards increasing the number of passengers from the current 6-million a year to 18-million by 2025.
In recent years, the airline has invested heavily in its fleet and was the first African carrier to fly the Boeing 787 Dreamliner. In 2015, the airline placed an order for six new Boeing 787 Dreamliners at a cost of $1.3-billion. It intends to increase its fleet from 83 currently to 110 by 2025.
Ethiopian Airlines is also investing in a new cargo terminal, a new hangar and a new headquarters building and is expanding its aviation academy.
Ethiopian Airlines is Africa’s largest carrier, with revenues of $2.2-billion in the 2014/15 financial year.
“Ethiopia represents a vibrant market with incredible potential. We are proud to be associated with Africa’s most profitable airline. This is likely to be the first of many high-impact projects we support in the coming years,” notes ATI CEO George Otieno.