South Africa’s largest pharmaceutical manufacturer, Aspen Pharmacare, may have announced a relatively tepid set of annual results for the year ended 30 June 2019, but the anticipation of a reduced debt load freeing up cash flows pushed its share price up 12% the day after its results announcement.
African airlines ground Max 8s after Ethiopian plane crash
Three African airlines have grounded their Boeing 737 Max 8s following the crash of Ethiopian Airlines Flight 302 on Sunday, while others are reconsidering their plans to buy the aircraft.
- Ethiopian Airlines, Africa’s biggest and most profitable operator, grounded the five other Boeing 737 Max 8s it has in its fleet. It currently has pending orders for 63 more airplanes, 29 of which are Boeing 737 Max 8s.
- South Africa’s Comair, which operates a British Airways franchise and a low-cost carrier service, grounded its Boeing 737 Max 8 after a day of sustained public pressure. The plane was received just two weeks ago as the first delivery in an order of eight.
- Morocco’s Royal Air Maroc also grounded the plane it has in service, which is one of four the North African airline has ordered.
- Mauritania Airlines, which was the first in Africa to receive the Max 8 model of the 737, in December 2017, is yet to announce whether it will join the growing number of countries and airlines grounding their planes.
The plane crash has raised questions about the Boeing 737 Max 8’s safety record, as it comes just five months after an Indonesian Lion Air jet plunged into the ocean.
- Other buyers that have not yet taken delivery of the aircraft include Nigeria’s Arik Air, which has orders for eight Boeing 737 Max 8s.
- Kenya Airways has said it is reconsidering early-stage plans to buy the 737 Max 8 and may opt for the larger Boeing 787 Dreamliner or switch to Airbus.
- Kenya, which lost 32 of its citizens in the Sunday crash, also sought to assure the public that “no foreign carrier is currently operating the aircraft type in Kenyan airspace”.
Ethiopian Airlines has been on a rapid expansion plan, which saw it revise its fleet target from 120 to 150 airplanes by 2025.
- The airline is Africa’s largest airline by all metrics, and the only top airline on the continent currently turning a profit. It flew over 10 million passengers in 2018, using a fleet of 108 aircraft flying to 113 destinations.
- In 2018, Ethiopian Airlines’ main hub city, Addis Ababa, overtook Dubai as the main transfer hub in sub-Saharan Africa. In January, prime minister Abiy Ahmed inaugurated the newly-expanded terminal at Bole International Airport, which can now accommodate 22 million passengers.
- Ethiopian Airlines also owns stakes in several airlines in Togo, Malawi, Zambia, Chad, Guinea, and Mozambique.
- The Sunday crash is the airlines’ worst disaster, followed by a partially successful water landing in the Indian Ocean near Comoros on 23 November 1996 where 125 of the 175 passengers onboard died.
- Its most recent disaster was the crash of Flight 409 in the Mediterranean Sea shortly after takeoff from Beirut in January 2010, killing 90 people.
Bottom Line: The 35 Boeing 737 Max 8s ordered by Ethiopian Airlines is the largest Boeing order by an African airline and forms a large part of the carrier’s plans to further expand its long- and medium-range passenger service. As crash investigators work to find out what brought down the plane Ethiopian might have to put some of its expansion plans on hold.
Countries that have banned the Boeing 737 Max 8 from their airspace: