It is without question that the airline industry across the world has been severely impacted by the coronavirus.
With social distancing protocols in place, border closures across many nations, and the fear of contracting the virus, many travelers/tourists are unable and/or unwilling to purchase airplane tickets to travel. This has led to devastating downturns in revenues for those in the airplane industry.
Experts predict global annual losses of up to $84.3bn. This unprecedented time has pushed industry giants like American Airlines and Emirates to seek government support.
Ethiopian Airlines’ Cargo Flight
Ethiopian Airlines, one of Africa’s leading airline company has found a new way of generating income by switching from passenger flight to cargo flight. The CEO of Ethiopian Airlines Tewolde Gebremariam said, though 90% of its passenger fleet is currently grounded, the switch from passenger flight to cargo transportation was “a lifesaving decision.”
According to the CEO, the decision was taken in March to shift into “survival mode.” Thus, there was a shift in resources from its passenger flight service to cargo transportation. Tewolde Gebremariam said the ability of the airline to make the switch was a result of its long-standing investment in the cargo business which led to the creation of Africa’s largest and most advanced cargo hub in the capital, Addis Ababa.
Ethiopian Airlines converted 25 passenger aircraft into cargo planes and built on its cargo fleet of 10 Boeing 777s and two Boeing 737s. The International Air Transport Association (IATA) estimates cargo will contribute 26% of airline industry revenue in 2020 which is quite the leap from 12% in 2019.
Cargo Flight destinations
Since the transition, Ethiopian Airlines has started shipping cargo to 70 destinations compared to just 10 at the onset of the pandemic. It also helped to deliver Covid-19 equipment throughout Africa, Europe, the United States of America, and South America. Furthermore, the airline also generated income through repatriation flights.
The airline repatriated Canadian nationals from ten countries which include Guinea, Cameroon, and Sudan. It has also offered to repatriate citizens for varying countries like Nigeria and South Africa.
Although the Cargo business and other income-generating activities have provided some sense of relief for the airline, the CEO, anticipated Ethiopian Airlines will lose $1bn in ticket sales by the end of the first quarter in June.
What this means is, Ethiopian Airlines still needs the main business of passenger flights to be able to function as it did before COVID-19. The steps taking by Ethiopian Airlines is, however, commendable as the COVID-19 era demands changes in business models for survival.