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Ethiopia suspends privatisation of Ethiopian Airlines

Ethiopia has suspended plans to privatize the country’s national carrier, the country’s finance minister told a press conference on Tuesday October 12th.

The privatization of Ethiopian Airlines, the continent’s most successful carrier, was part of a larger set of economic reforms that will see the country’s telecoms, logistics and other critical sectors privatized.

But Finance Minister Ahmed Shide told a press conference in Addis Ababa that the decision to suspend the planned privatization was informed by the fact that the airline is doing well and “appears robust.” “Maintaining the current capacity of Ethiopian Airlines is more beneficial to the economy,” he said.
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Ethiopia suspends privatisation of Ethiopian Airlines
By Morris Kiruga
Posted on Friday, 16 October 2020 12:10

Ethiopian Airlines worker transports a consignment of medical donation from Chinese billionaire Jack Ma and Alibaba Foundation to Africa in Addis Ababa
An Ethiopian Airlines worker transports a consignment of medical donation from Chinese billionaire Jack Ma and Alibaba Foundation to Africa for coronavirus disease (COVID-19) testing in Addis Ababa, March 22, 2020. REUTERS/Tiksa Negeri
Ethiopia has suspended plans to privatize the country’s national carrier, the country’s finance minister told a press conference on Tuesday October 12th.

The privatization of Ethiopian Airlines, the continent’s most successful carrier, was part of a larger set of economic reforms that will see the country’s telecoms, logistics and other critical sectors privatized.

But Finance Minister Ahmed Shide told a press conference in Addis Ababa that the decision to suspend the planned privatization was informed by the fact that the airline is doing well and “appears robust.” “Maintaining the current capacity of Ethiopian Airlines is more beneficial to the economy,” he said.

READ MORE Mobile money transfer: ‘Ethiopia hasn’t shut the door to M-Pesa’

In addition to its primary income stream as the continent’s busiest airline and other income streams from airports and hospitality, the airline pivoted on the pandemic’s shutdown of global travel to build its cargo capacity.

The carrier announced a profit in June, despite an estimated $1bn in lost revenue.
Ethiopian flights have been on average 40% full since the gradual resumption of passenger flights, its CEO told Bloomberg in early October. It also introduced medical cover for COVID-19 to boost passenger confidence.
The decision to suspend the privatization of Ethiopian Airlines halts one of the most anticipated plans in Prime Minister Abiy Ahmed’s rapid economic reforms.

It now seems unlikely that it will be considered again before the next elections in 2021. This will leave the ongoing privatization of the telecoms sector, which includes partially privatizing the state monopoly and issuing new licenses, as the biggest effort to privatize Ethiopia’s commanding heights. Read more

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