Ethiopian Airlines survival strategy proved to work despite $1 billion loss after grounding 90 percent of passengers’ planes
June 19, 2020
Ethiopian Airlines grounded about 90 percent of its passengers’ planes following as the Coronavirus became a global pandemic. The economic price is high.
Group CEO, Tewolde Gebramariam, said in a span of five months (between February and June) about $1 billion in revenue from its major income stream – passenger flights.
However, Ethiopian managed to pay for its monthly expenses which he said is about 5 billion Ethiopian birr (which is in the neighborhood of 146 million dollars).
The CEO spoke with great pride that Ethiopian Airlines did not lay off employees or decrease salary, did not take a loan to continue operation, and did not get financial assistance from the government during those challenging times.
He also said that loan repayment was paid in time without the need to ask for an extension of it.
As the global crisis hit, which affected the aviation industry, Ethiopian Airlines shelved its growth strategy and came up with a survival strategy.
A positive response to the cargo service, which was transporting medical supplies for COVID 19 prevention, enticed Ethiopian to expand further in the realm of cargo service.
Twenty-five passenger planes were converted to cargo by removing the seats. Not before long, Ethiopian Airlines became busy delivering medical supplies to COVID 19 affected countries including Spain, Portugal, Germany, France, the UK, USA, Canada, Brazil, and dozens of African countries.
The CEO said that Ethiopian Airlines is proud that it was part of the life-saving efforts in many countries. “It is something that all citizens could be proud of,” he said.
He also recognized the efforts of Ethiopian Airlines employees for the hard work and the Ethiopian government.
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