Ethiopian Airlines agrees to buy Boeing 777 freighters in $1.3 billion deal, mulls mid-sized aircraft

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Ethiopian Airlines continues to build up its fleet to meet rising demand on back of a rapidly growing economy and population in Africa. Tiksa Negeri / Reuters

Ethiopian Airlines, Sub-Saharan Africa’s largest carrier, agreed to buy four Boeing 777 freighters in a deal worth $1.3 billion, and continues its discussions with the Chicago-based plane manufacturer to buy wide-body 777Xs while also mulling the purchase of mid-sized aircraft the company is looking to produce.

“We are still discussing the [possibility of ordering] 777X” chief executive Tewolde GebreMariam said at the Dubai Air Show today. “As an airline we want an airplane to replace the 757, it’s right-sized and right range for the mission that we have, especially taking [into account] the altitude at Addis Ababa airport,” he said. Ethiopian would be interested in buying between 10 and 20 of the aircraft if Boeing decides to produce them, GebreMariam added.

Earlier this week Boeing, the world’s largest aerospace company, said it sees strong interest in the Middle East for a mid-sized jet and is progressing with plans to develop a new model, but did not provide a time-frame for the aircraft. Earlier reports have suggested the aircraft would have around 220-270 seats and a smaller cargo hold to add passenger capacity.

Ethiopia is Africa’s fastest growing economy which is set to expand 8.5 per cent in 2017, according to the International Monetary Fund. Half of the world’s population will reside in Africa by 2050 according to UN figures.

Africa has always faced “tailwinds due to rising demand [rather than headwinds due to rising competition]. So we expect the tailwinds to continue, it’s a very fast growing region,” GebreMariam said.

The carrier doesn’t plan on purchasing any Airbus A350s and the expansion of the country’s airport is progressing he said.

“Maybe part of the project will be completed by mid-2018 – the expansion of the existing airport, we are expanding the terminal. In total, when the project is fully operational it will take capacity to 22 million passengers, around 10 million now,” GebreMariam said.

Ethiopian, which competes with South African Airways and Kenya Airways had committed to two freighters at the Paris Airshow but topped that pledge with two aircraft on Tuesday. The airline will begin taking delivery of the aircraft in 2018. Ethiopian Airlines has 20 777-200s already in operation.
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