Ethiopian to buy stake in Air Malawi to establish new airline in Zambia

Victoria
By Victoria November 22, 2012 19:48

Ethiopian to buy stake in Air Malawi to establish new airline in Zambia

Ethiopian Airlines is to buy stake in the frail airline of Malawi. The Government of Malawi recently asked companies to present expression of interest for the partial acquisition of its failing airline. Subsequently 11 airlines submitted to the Malawi Privatisation Authority. Ernst & Young has been undertaking a study on the privatisation of Air Malawi which this ceased operation. After evaluating the expression of interest eight companies were selected to participate in the bid.

At the 44th General Assembly of the African Airlines Association (AFRAA) held from November 18-20 in Johannesburg CEO of Air Malawi, Patrick E. Chilambe, told Aviation News Online that the bidding companies will submit their bid proposals to the Privatisation Authority. The companies who presented expression of interest yesterday had a meeting with officials of Ernest and Young and the Malawi privatisation Authority in Blantyre. Com Air of South Africa is the other airline that submitted expression of interest. The government of Malawi plans to establish a consortium by selling a 49% stake to a foreign airline and a local investor and keep 51% of the shares to Air Malawi.

Hired by the Malawian government, Ernst & Young advised the government to look for a partner and partially privatise the national flag carrier. Two of Air Malawi’s aircraft are in South Africa retained due to fuel debt. An official close to the privatisation process told The Reporter that Ethiopian is the best company among the eight companies that submitted expression of interest.

Tewolde Gebremaraim, Ethiopian CEO, who was attending AFRAA’s 44 AGA told Aviation News Online that Ethiopian wants to help Air Malawi. “They are our African brothers and we want to share our experience,” Tewolde said. The CEO said that Ethiopian is planning to establish a new airline in Zambia. “We have been holding talks with the Zambian government and we hope to sign a Memorandum of Understanding with the government soon,” he said.

Ethiopian partnership with ASKY Airline of Togo has been successful. The Lome based airline, ASKY, which operates Bombardier Q400 aircraft currently serves 15 destinations in West Africa. Ethiopian owns a 25% stake on ASKY.

In related news, Ernst & Young this week announced that by 2025 Ethiopian will be bigger than South African Airways (SAA) . Zemedenh Negatu, managing partner of Ernst & Young East Africa, who made a presentation at AFRAA’s AGA held at the Sandton Convention Center in Johannesburg, said that by 2025 Ethiopian will be bigger than SAA. Zemedeneh said SAA will still then be bigger than Kenya Airways (KQ). He attributed Ethiopian Airlines success to management independence. Zemedeneh pointed out that African carriers should collaborate to survive the stiff competition coming from non-African carriers.

Victoria
By Victoria November 22, 2012 19:48
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