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Though the blocked fund is a small fraction compared to over
$800 million stranded in Nigeria, the carriers said the development would
continue to have dire consequences on the East African country – akin to the
experience in Nigeria.
The airlines, under the aegis of the International Air
Transport Association (IATA), reiterated that the ability to repatriate
revenues is guaranteed in international agreements. Therefore, all parties must
abide by these agreements to keep the world connected by air.
IATA, at the Focus Africa session held in Ethiopia
yesterday, noted that Ethiopia is recovering strongly from the COVID-19 crisis,
with its benchmark regional connectivity (within Africa) standing at 113 per
cent of pre-crisis levels, according to IATA’s Connectivity Index.
Passenger traffic originating from Ethiopia tracked at 19
per cent above pre-crisis levels in the first quarter of 2023. This is well
ahead of Africa’s overall passenger demand which stood at 8.7 per cent above
pre-crisis levels in the first quarter.
IATA’s Director General, Willie Walsh, said the low allocation
of foreign currency (U.S. dollars) to the aviation industry by the Ethiopian
Government and Central Bank means that $95 million in airline funds are blocked
in the country.
“This sends all the wrong signals and puts at risk the
economic and social benefits that its global hub supports Ethiopia’s
development with. Ethiopia must follow the global rules that it benefits from.
It’s time for the government to work with industry to resolve this situation
quickly,” Walsh said.
Ethiopian Airlines Group CEO, Mesfin Tasew, reckoned that
Ethiopian Airlines is performing very well though.
Tasew said: “Our current performance, in all parameters,
indicates that our success will continue strong. We have recovered well from
the impacts of the pandemic. By the end of this fiscal year, we expect to
generate $6.1 billion, this is a 20 per cent growth compared to our last year’s
performance. We will be transporting 13.7 million passengers, which is also a
55 per cent increase from the same period last year.
“While our operations and milestones continue to be
persistent, we still have challenges regarding expatriating our accumulated
funds in various countries. As of today, we have more than $180 million
stranded in several countries. Transferring funds remains a critical challenge
for airlines,” he said.
Additional key priorities to support a strong aviation
sector in Ethiopia include implementing the Single African Air Transport Market
(SAATM).
SAATM was the solution to unlocking travel within the
African continent pre-pandemic. Twenty-three countries have signed the
Memorandum of Implementation to date; however, none have ratified it. Full
implementation of SAATM across the continent would generate significant
economic benefits. In Ethiopia alone, it could create 21,000 new jobs and add
$81.8 million to the GDP.
Fostering the growth of a Sustainable Aviation Fuel (SAF)
industry: SAF will play the most significant role in reducing the aviation
industry’s carbon footprint, aligning with the industry’s commitment to
achieving net-zero carbon emissions by 2050.
To help meet this goal, IATA urged the Ethiopian government
to explore developing and incentivising SAF production.
The country has the potential to become one of the biggest
SAF producers with unique feedstocks, vast land area, and significant solar potential
– thus providing opportunities for both biomass feedstocks and renewable
non-biomass feedstocks like solar and wind power-to-liquid (PtL) solutions.
“Ethiopia’s aviation industry is set to triple by 2040, with
an average six per cent growth in passenger traffic over the next 17 years. The
Ethiopian government is uniquely positioned to stimulate SAF production, a move
that would not only support the forecast surge in air travel but also trigger
substantial job creation and boost the local economy. Ethiopia can take the
lead, and in doing so, construct an aviation future that is as sustainable as
it is successful,” Walsh said.