Monday, July 1, 2013

■ ETHIOPIA: ECAA refuses to renew 19 carriers' operating licences on grounds of inactivity.

The Ethiopian Civil Aviation Authority (ECAA), the Ethiopian authority in-charge of regulating the local airline industry, has refused to renew the operating licences of 19 out of 31 private domestic operators and aviation-related businesses on the grounds that the companies have yet to launch operations of any form.

Ethiopian Airlines F50

According to The Reporter, the ECAA said that "most" of the companies granted investment licenses had yet to even acquire a single aircraft let alone launch flights with some preferring to sub-contract work out to other airlines, thereby undermining the business of those that do operate their own flights.  

The twelve of the private domestic airlines have renewed licenses including:
  • Abyssinian Flight Services,
  • Trans Nation Airways (one of the subsidiary companies of MIDROC Technology Group)(TNW), 
  • Rotation International, 
  • Suhura Air Transport (owned by the famous khat trader, Suhura Ismail), 
  • International Cargo Aviation Services (ICAS), 
  • Amibara Agricultural Development Enterprise, 
  • Teddy Air Services, 
  • Tedros Engineering Plc, 
  • Aquarius Aviation Plc, 
  • National Air Services Enterprise (7N), 
  • Zemen Flight Services,
  • Abyssinian Ballooning
Ethiopia's heavily regulated aviation industry is restricted to local ownership only, with those operations also restricted to only 50-seaters and less. Foreign investment is currently forbidden under current legislation though Addis Ababa is believed to be drafting new laws that will permit a 40% foreign ownership cap in local carriers.

The ECAA has tried to claim that those regulations are there to protect the industry from "over-ambitious" investors with no experience of the sector though others have pointed to heavy protectionism aimed at giving national carrier, Ethiopian Airlines (ET), the upper hand.