The Ethiopian aeronautical authority, in collaboration with the Ministry of Transport, is working on a draft policy that will increase private sector participation by removing current restrictions on capacity and traffic rights on national and international routes.
“We recommend that the Civil Aviation Authority reconsider the restrictions on the scheduled flights of private airlines in a way that does not affect the market,” explained Transport Minister Dagmawit Moges. He also added that the legislative review is part of the programs of political reform and economic progress implemented by Prime Minister Abiy Ahmed.
Our partner site Aeroin reports that although the country has eight private airlines, with three more in the process of being created, none of them operate regular flights. Private airlines are restricted to 50-seat aircraft and there are no private maintenance, repair and overhaul (MRO) facilities. Foreign investors cannot invest in a national operator.
Private airlines told the newspaper that unfair competition practices are either bankrupting them or delaying their recovery from the shocks of COVID-19. They also complained about the lack of access to hangars and runways. The lack of space in the hangars forces them to send planes to Kenya and South Africa for maintenance, incurring expensive expenses in foreign currency.
Good for everyone
An environment without competition is very bad for consumers, who find themselves without options to choose from and at the mercy of the prices and conditions charged by a single airline, the state-owned Ethiopian Airlines. Market opening can change this game. Before the COVID-19 pandemic, the International Air Transport Association (IATA) predicted that Ethiopia’s air transport market would grow by 226% over the next 20 years.
Such large growth in a country of 115 million people would lead to significant demand for new aircraft and, in this context, aircraft manufacturers could benefit. Since private companies are currently limited to 50 passenger jets and their hands are tied by law, their desire to operate larger jets cannot be fulfilled.
The policy change will encourage companies to order larger regional jets, such as those from the Brazilian giant Embraer. These planes could help companies enter the 22 domestic routes that only Ethiopian Airlines can operate under current civil aviation regulations designed to protect the national airline.
Certainly, the Embraer sales team is keeping an eye on what is happening in Ethiopia.
