in Business & Finance

Ethiopian nearing early JV deal for new Zambian carrier

Posted 3 October 2017 · Add Comment

Ethiopian Airlines is set to tighten its stranglehold on the Southern African market following comments by CEO Tewolde Gebremariam that a deal with the Zambian government over its Zambia Airways project could be reached in the coming weeks, reports ch-aviation.

In an interview with Bloomberg, Gebremariam said the tentative joint-venture carrier would feature the Zambian government and private-equity investors as additional shareholders. The signing of an outline plan in the coming weeks would then set to stage for a final agreement which could be concluded by November. Zambian Minister of Transport, Brian Mushimba, recently told ZNBC that the Zambia Airways project was currently being vetted by the Ministry of Finance before heading to Cabinet for review. If all goes according to plan, the new airline could be launched as early as next year.

The Zambian domestic market is currently home to Proflight Air Services, Royal Air Charters, and the recently relaunched Mahogany Air. All three are privately-owned. Proflight is the oldest having launched in 1991 around the time that IMF-backed privatization reforms required government to cease subsidizing the original Zambia Airways. Without state funding, the carrier eventually folded in 1994.

Ethiopian is in the process of developing Lilongwe into a Southern African feeder hub by virtue of Malawian Airlines in which it has a 49% shareholding. Recently, the two were awarded domestic Mozambican traffic rights with Ethiopian being granted 108 route authorities and Malawian seven. According to Tewolde, Ethiopian is also in talks with Uganda over a joint venture airline while Equatorial Guinea's CEIBA Intercontinental  is considering expanding their maintenance agreement "into something bigger.”

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