Why is Ethiopian Airlines overcharging passengers?

Ethiopian Airlines (EAL) is consistently proving to be a bad financial deal for travelers to and from Ethiopia. EAL used to tout itself as the most affordable way to travel back home. But our research finds that at least nowadays, that is most certainly not the case. For the three-week time period beginning on September 1, we randomly searched on Expedia.com for round-trip flights from locations where many Ethiopians live abroad, to Addis Ababa. What we find is that EAL always turns out to be more expensive than the best deal, sometimes by many hundreds of dollars. See the results further below for trips to Addis from DC, Atlanta, London, and Rome, for example.

Why is EAL overcharging passengers? Two factors appear to play a role.

(1) Extracting foreign exchange from the diaspora. Even before the Meles-disappearance fiasco, the regime had been in a bind, running dangerously low on foreign exchange reserves. But now things are going from bad to worse: Woyanne elites and others with political connections
are bringing their hard currency reserves into safety, i.e. out of the country, as reported here. The past and ongoing Forex crunch of the TPLF regime is likely to create pressure for companies under TPLF control that get their primary business from the diaspora and foreigners — such as EAL — to do their best to extract as much hard currency money from their customers. After all, hard currency from the diaspora is now needed more urgently than ever, to keep senior military officials rich and happy so that they don’t turn on the TPLF elite.

(2) EAL mismanagement. Since a competent chief executive of EAL had been removed and the airline put into the hands of TPLF insider Tewolde Gebremariam, EAL has been undertaking bizarre moves, such as forcing airline staff to take wage cuts shortly after announcing sterling profit growth (read here). So it shouldn’t surprise if flights become as expensive as they have become.

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