Ethiopian Airlines has lost $550 million in revenue since January, chief executive Tewolde Gebremariam said this week, blaming the coronavirus outbreak that has forced Africa’s largest and most profitable airline to suspend most of its passenger flights.
Due to the global pandemic, the flag carrier has put on hold flights to 91 international destinations. “Currently, the airline has suspended commercial flights to 90 percent of its international destinations, meaning it is serving only 10 percent of its international destinations,” Gebremariam said.
The airline has been taking steps to plug revenue leaks, diverting its business to cargo flights and maintenance. It has also ventured into charter flights for foreign nationals – mostly Americans and Europeans that want to be repatriated to their home countries – to compensate for losses.
“Our cargo and maintenance services are doing well,” the chief executive said, adding that the airline has “already repatriated U.S. peace corps as well as Europeans from Africa.”
The unprecedented economic crisis has triggered fears of massive loss of jobs across the world, especially in the highly vulnerable aviation industry. There have been rumors of employee downsizing by Ethiopian Airlines but the CEO refuted such reports that the airline is sending home workers.
No permanent employee has been dismissed despite losses, he said, but admitted that contract workers had been laid off. The carrier has nearly 17,000 workers, 2,700 of whom are contracted. “Ethiopian Airlines has not laid off any regular employee and has no plans. Ethiopian Airlines is losing significant part of its regular revenue but there is no plan to reduce regular employees,” a company statement said.
Gebremariam noted that the international aviation industry has lost $52 billion, with Africa losing $4.2 billion. Meanwhile, the economic fallout caused by the coronavirus outbreak could see global airlines lose more than $250 billion, the International Air Transport Association said earlier this month.
The projection came as more countries closed borders to passenger flights and ground domestic operations, triggering an economic recession. As of March 24, broader restrictions to airline operations covered 98 percent of passenger operations globally, according to the industry lobby.