Monday, November 3, 2008

Ethiopian Airlines, profitable 2007/08 performance

Ethiopian Airlines recorded positive results in many of its performance parameters during the fiscal year 2007/08. According to the financial reports released, Ethiopian generated 9.2 billion Birr in operating revenue during the budget year, a 34% increase over that of the previous year.

For the period in review a net profit of 507 million Birr was reached. During the same period, Ethiopian also transported 2.5 million passengers, an increase of 20% compared to that of the preceding year.

The growth in revenue and the resultant operating profit are directly attributed to the apparent growth of traffic following the increase of many flight frequencies and the introduction of additional new destinations on the international sector. Revenues from cargo sales and other auxiliary services contributed to the overall financial performance of the company. During the fiscal year under review, total operating expenses increased by 31% to 8.8 billion Birr in contrast to that of the previous year. Fuel cost represented the lion's share followed by the cost of aircraft/engine leases and payroll expenses.

Major activities during the budget year included:

* Launching flight schedules and services to Zanzibar and Kuwait
* Concluding of code share agreements with Lufthansa, Gulf Air, Air One and Brussels Airlines
* Leasing additional passenger aircraft and two B747-200 freighters
* The signing of an agreement with Boeing to acquire two MD-11 Freighter aircraft
* Installing the B737-NG Simulator
* Implementing online and e-ticketing
* Completion of modern dormitory buildings for trainees of Ethiopian's Aviation Academy
* The phasing out of one B767-200, one B737-200 and one DHC-6

In line with its vision 2010, Ethiopian developed strategies for the enhancement of human resources, cargo revenue, information systems and the domestic services. Accordingly, Ethiopian Airlines has embarked on an IT business transformation program investing over US$30 million for the project.

Despite the escalating fuel price and stiff competition, Ethiopian scored the highest revenue and a net operating profit of over half a billion Birr. The company attributes it's success to its customers and other stakeholders of the airline as well as its employees.

[29 Oct 2008]