Flying criticism

Ethiopian Airlines to China: last international carrier standing

in depth

This article is part of the dossier:

Corona Chronicles: 23-27 March

By Rémy Darras

Posted on March 27, 2020 10:13

1. Despite criticism for its decision to continue operations to #China, @flyethiopian has stood its ground and is now the sole means of importing necessary material to fight #coronavirus across the #African continent 2. “One argument is increasingly making a case for @flyethiopian’ decision: a month and a half later, the situation has changed. The epicentre of the virus has shifted to Europe, whereas China has managed to contain the #pandemic ,” writes @remyda . 3. “@flyethiopian has gotten a boost from being the only current operator, has a monopolistic position in these routes and can therefore charge higher rates. But above all the airline wants to show that it has Beijing’s back, as #China finances #Ethiopia’s economy” says one source.

After being loaded onto a cargo plane on the evening of 21 March in Guangzhou, 108 tonnes of medical supplies donated by Chinese billionaire Jack Ma arrived at Addis Ababa airport on Sunday, 22 March via an Ethiopian Airlines Boeing 777 Freighter.

The boss of e-commerce site Alibaba pledged on 17 March via his foundation to send every African country 100,000 masks, 20,000 test kits and 1,000 medical protective suits.

And it is thanks to Ethiopian Airlines –  which boasts the top network on the continent – that these supplies began to be redistributed on Monday.

After inking an agreement in November 2019 with Ethiopian Prime Minister Abiy Ahmed, Alibaba is looking to transform Addis Ababa into an African global e-commerce hub, particularly for Ethiopian coffee, as the conglomerate has already done with Kigali.

READ MORE: Alibaba’s Jack Ma, Paul Pogba mobilise against coronavirus in Africa

Pan-Africanism of the skies

This is a powerful symbol for a company that has in recent years been the flag bearer of a certain pan-Africanism of the skies, arousing suspicions of hegemony from a number of critics.

However, on 20 March, Ethiopian Airlines suspended 30 international routes, including Angola, Cameroon, Chad, Congo, DR Congo, Madagascar and Nigeria, some of which remain so indefinitely.

Addis Ababa’s giant of the skies could no longer operate passenger flights to some 20 airports due to bans on entry, border closures, passenger quarantines and decreased traffic.

It was forced to slash its operations by 25%, grounding around 20 jumbo jets according to Group CEO Tewolde GebreMariam, who on 20 March said that the company had lost $190m in revenue since February.

Although the country’s official count of coronavirus cases stands at 12 (at time of publication) and all passengers arriving on its territory must submit to a 14-day quarantine, Ethiopia’s flagship carrier has not suspended its flights to China, where the epidemic originated.

Despite Gulf State carriers and Turkish Airlines, which are also used by African travellers to reach China, having suspended their Chinese routes, the Addis Ababa giant remains the last major international carrier to touch down on Chinese soil.

The only other major carriers that continue to fly to mainland China are Japan Airlines, Korean Air and Russia’s Aeroflot, but their schedules have been significantly reduced.

The pandemic has not kept Chinese airliners from maintaining their routes to cities like San Francisco, Melbourne and Frankfurt. British Airways and Turkish Airlines continue to fly to Hong Kong.

Daily flights to China

This week Ethiopian Airlines will operate a daily flight to Beijing and Shanghai, two flights a day to Guangzhou, a city supplying African importers (Guangzhou and Hong Kong flights in particular have substantial cargo capacity, most of which are Nigerian and Kenyan, which go there to stock up on clothing and electronics), and three flights a week to Chengdu, a city producing machine tools for Africa and boasting a university which hosts a number of African students.

In addition, the carrier operates cargo flights to Liège, Belgium every day for DHL which then goes on to Guangzhou, Hong Kong and Shanghai.

In early February, the company’s decision to maintain its flights to China sparked a controversy against a backdrop of anti-Chinese sentiment expressed by some in the West and Africa.  Kenya’s President Uhuru Kenyatta himself urged his big neighbour to suspend its operations to avoid bringing already vulnerable health systems to their knees.

READ MORE: Africa faces a coronavirus catastrophe

‘Chinese brothers and sisters’

Falling into line with the recommendations of the World Health Organization (WHO), headed by Ethiopian-born Tedros Ghebreyesus, which called on the international community to refrain from cutting off trade and to demonstrate its solidarity with its “Chinese brothers and sisters,” Ethiopian Airlines defied the shower of criticism, which has since been quelled.

One argument is increasingly making a case for Ethiopian Airlines’ decision: a month and a half later, the situation has changed. The epicentre of the virus has shifted to Europe, whereas China has managed to contain the outbreak.

The same policy has prevailed for Europe as for China.

Ethiopian Airlines continues to operate a flight from Paris every evening and only suspended its service to Rome very recently, on 17 March, when the airport closed. “What applies to China also applies to Europe. The idea of suspending European and Chinese flights is not on the table,” an Ethiopian official said.

And the Ethiopian carrier could not abandon its Chinese routes two months ago, as they are the network’s most profitable, alongside its US flights, and offset losses in weaker segments, such as certain African capitals. Nor could it leave a landlocked country of 109 million people without any connection to the outside world or cut off Africa’s only remaining link to China.

Remaining passengers

While major carriers have suspended up to 80% of their operations, Ethiopian Airlines continues to operate its intercontinental routes and may even be one of the last international carriers to maintain them. But who are their passengers?

Nigerian and Kenyan importers, who formed the bulk of the passengers on flights to Guangzhou and Hong Kong, are no longer able to travel as of this week, but Chinese white-collar and blue-collar workers, who have a strong presence in Ethiopia, are expected to continue travelling to Beijing and Shanghai, as they represent the largest share of passengers and are the most frequent travellers to these destinations.

Theoretically, it is still possible for European and North American businesspeople to fly to Beijing. Besides Paris, the airliner has routes departing from Brussels, Frankfurt, London and Vienna in Europe, and Chicago, New York City and Washington DC in the US, with a stopover in Lomé, Togo instead of Dublin, Ireland.

A monopolistic position in certain routes

Several people have noted that Ethiopian Airlines has been able to get by thanks to its considerable stockpile of cash, which it has been accumulating for 15 years, and low production costs.

According to a person familiar with the African airline sector, it is possible to find an entirely economic justification for the carrier’s decision.

“Between Chinese passengers returning home, foreigners leaving China and freight operations, there’s always a little bit of traffic. Ethiopian Airlines has gotten a boost from being the only current operator, has a monopolistic position in these routes and can therefore charge higher rates. But above all the airline wants to show that it has Bejing’s back, as China finances Ethiopia’s economy,” said one source.

READ MORE: WHO’s Tedros: ‘Don’t abandon the poorest to coronavirus

Gateway into Africa

According to several experts, beyond Ethiopia’s strong and longstanding political relationship with China, the country wants to protect its trade ties with China. Ethiopia serves as gateway for Chinese investment in Africa.

In 2017, the airline’s executives in China asserted that “the ultimate objective was to connect all of China’s major trade and industrial hubs to Ethiopia as well as to the African continent.”

Several Chinese companies have made Ethiopian Airlines and Ethiopia a link in their continental expansion strategy. This is true for the behemoth construction conglomerate China Communications Construction Company (CCCC), which built the 15 August 1960 bridge in Brazzaville and, in Ethiopia, more than 2,000 kilometres of motorway, industrial parks, the Addis Ababa airport expansion, to list a few.

Then, there is Shangtex, which manufactures more than 20 million tonnes of clothing per year for major brands, Shenzen-based telecommunications equipment company ZTE and Transsion, Africa’s leading feature phone manufacturer.

These are just a handful of the many companies that could benefit from Ethiopia’s industrial parks and logistics facilities as well as Beijing’s investment in this infrastructure. Last year, China invested $1.8bn to improve electricity on the Ethiopia-Djibouti line that increased electricity supply to Ethiopian cities and 16 industrial parks.

Sole survivor?

In recent years, China has established itself as one of Ethiopia’s most important partners. According to a report published last year by the BBC, the debt Ethiopia owes Beijing is estimated to be as high as nearly 40% of its GDP.

China’s support also extends towards the national carrier. “China has a strong trade and investment relationship with Africa. And Ethiopian Airlines is the major carrier that links China with many African countries. If we stop flights to China we break that relationship,”  GebreMariam told the Ethiopian newspaper The Reporter last Friday.

Bottom line: In an African airline sector where the vast majority of airline companies are extremely vulnerable and are moving towards a very bleak, if not disastrous future, Ethiopian Airlines could be the sole survivor. Will their only passengers be Chinese?

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