Tuesday, February 12, 2013

■ ETHIOPIA: "We must protect Ethiopian Airlines against unfair competition from Gulf carriers": Kuma.

EthiopiaDiriba Kuma, Ethiopia's Minister of Transport, has confirmed that it is indeed Ethiopian Government policy to "protect the country's airspace and national carrier, Ethiopian Airlines (ET)" from foreign carriers, the Gulf ones in particular, whom he accused of "having an unfair competitive advantage" apropos their access to below market price-Jet A1 fuel.

Mr Kuma made the remarks last week during a Q&A session in the Ethiopian Parliament, the Federal Parliamentary Assembly, in Addis Ababa.

The Ethiopian press late last month attempted to portray an ongoing spate between Ethiopia and Etihad Airways (EY) regarding the latter's intended start of 14x weekly flights to Addis Ababa, as having been more about "jealousy" amongst the Emirati based carriers than an actual bilateral trade issue. Etihad however, claims the Ethiopian Civil Aviation Authority (ECAA) had rejected the airline’s application for the required operating permit, despite the existence of a Memorandum of Understanding concluded by the governments of Ethiopia and Abu Dhabi in June 2007.

Diriba Kuma
Diriba Kuma
Pertaining to the Etihad affair, Kuma stated that Etihad's access to "cheaper" priced Jet A1 allowed it to compete unfairly.
They charge an extremely low price, considering the market price of air transportation at the moment,” he said.
Source [TheReporter]

The Aviation sector both into and out of Ethiopia is highly regulated with "The Ethiopian Civil Aviation Law" prohibiting private airlines from operating aircraft which have more than 20 seats, in addition to allowing only Ethiopian nationals to hold ownership. The cargo sector, however, was liberalized in 2002.

In June 2012, a new draft air transport policy proposed to remove the seat limit and allow foreign investors to invest in the sector jointly with Ethiopian investors allowing, however, for only a maximum of 40% shareholding to foreign investors.