The Board of Directors of the African Development Bank (AfDB) approved on Wednesday, 23 March 2011 in Tunis, a U.S.$ 40-million second lien corporate loan to Ethiopian Airlines to support the purchase of five Boeing 777-200LR passenger jets.
Two years ago Ethiopian placed firm orders for five B777-200LRs valued at 1.3 billion USD at list price. Since last September Boeing delivered three of them to the national flag carrier of Ethiopia. The airline is using the new aircraft on its long haul flight services to north America and Asia. The remaining two will be delivered in April and July this year. Ethiopian
The management of Ethiopian said the new aircraft will enable it to expand its capacity on long haul routes to and from Africa.
The press release issued by AfDB says “With its excellent service reputation, highly respected indigenous training and maintenance operations, and well integrated cargo network, Ethiopian Airlines continues to play a major role in capacity development within Ethiopia and through that, as an engine of the country’s economic growth. The airline’s Addis Ababa hub has become an important gateway for businessmen traveling in and out of Africa and taken on a role as a hub of African economies’ integration with the rest of the World.”
The bank said the project under consideration will also create about 400 jobs in the short term and 800 jobs in the medium term. “Most of these jobs are for skilled people. About 25 percent of the new positions are expected to be filled by women. The income levels of the new employees will be enhanced by the project; and this will in turn contribute to poverty reduction in Ethiopia,” it added.
According to AfDB, supporting the Project and the company’s overall long term investment plan, the AfDB is Ethiopian Airlines’ partner in its continued technical and service excellence that are in line with the Ethiopian government’s priorities and strategies, as well as with AfDB’s Country Strategy for Ethiopia.
AfDB’s loan covers only five percent of the required financing (1.3 billion) for the purchase of the five B777s. Ethiopian says it will solicit more financing from international commercial banks as it has already secured loan guarantee from the US EXIM bank. Some amount of the financing will be drawn from its own coffer. Ethiopian is also in the process to order B777 freighter aircraft.
Ethiopian has 10 B787,10 737, and 12 A350XWB new jetliners in its order book. Ethiopian is the first African carrier to order the Dreamliner aircraft to be followed by Air Marroc, Kenya Airways and Arik Air of Nigeria. The ten Dreamliners were supposed to be delivered in 2008-2010, which Boeing failed to materialise for various reasons. Boeing hopes to deliver the first 2 B787s to Ethiopian in January next year.
Ethiopian Airlines was established in 1945 and is wholly owned by the government of Ethiopia.