Ethiopian Review

(By Kirubel Tadesse) – After the shock pull out by financers from Ethiopian Airlines’ Boeing 787 Dreamliner aircraft purchases, the flag carrier’s senior officials have been out on the road in an effort to strike another deal.
Girma Wake, CEO of Ethiopian, spoke to Capital and explained that he is on the mission in the United States. Girma is believed to be accompanied by other senior officials.
It was reported late last week that DVB and ING, the two financers of the Dreamliners’ purchase, had pulled out due to the severe effects of the financial crisis on the aviation industry.
Back in 2005, the flag carrier placed an order to purchase ten 787-8 Dreamliner aircraft with a total value of 1.3 billion dollars. The deal Ethiopian secured was appreciated as one of the best deals for the industry.
When one of the financers totally left the aviation industry, also bailing out of its deal with Ethiopian, the second one, DVB, also pulled out, but has expressed an interest in negotiating for a new deal on better terms.
The Ex-Im Bank of the United States was guaranteeing the loan the two banks would provide to purchase the Dreamliners and reports indicate that it is not backing down.
The repeated delays on Boeing’s part to deliver the aircraft led to the expiration of Ethiopian’s agreement with the financers. Boeing is compensating Ethiopian for the delays, but neither of the parties would say for how much.
As well as seeking new financing, Ethiopian is also digging into its own pockets to keep up with payments.
“Ethiopian is in a good financial position to finance the Dreamliners’ purchase. There are other financing options,” one source was quoted as saying.
Despite the global slowdown, Ethiopian is still in the black with 9.2 billion birr in operating revenue last year, a 34 per cent increase from the previous year.
The current fiscal year is also another record high for one of Africa’s most prestigious airlines, with a net profit of 515 million birr during the first six months.
Ethiopian managed to improve its mid year profits by nine per cent compared to the same period last year. The airline has collected 6.7 billion birr in operating revenues during the first six months: July to December 2008.