Ethiopian Airlines profits fall -Graduates frontline marketing personnel

By Groum Abate - Capital

01 September 2006

Ethiopian Airlines (EAL) has announced net profits of over 125 million birr during the past fiscal year. The national carrier is also expanding skilled human capital through successive training programs and raising the profile of the airline by purchasing the latest aircraft.

Sources told Capital that the profits came after the airline struggled against increasing costs and represents a fall from the 2004-5 fiscal year.

According to the airline's financial report, it secured a net profit of 277 million birr in 2003, up from 79 million birr net profit in 2002. By the end of 2005, EAL netted almost 500 million birr.

According to our sources, the escalating prices of oil products in the global market affected profitability. The petroleum industry this year registered record prices of 78 dollars per barrel, with jet fuel costing the airline dearly.

The nine-month performance report of EAL shows that the increasing price of fuel cost it 192.5 million birr in eight months. Despite the stiff competition from airlines owned by oil producing states, Ethiopian is "doing well" sources said. "Several African airlines declared bankruptcy while Ethiopian is still making profit," they added. Ethiopian has made a fuel surcharge on fares, but the management said the increment was minimal compared to the surge in the price of fuel.

Ethiopian Chief Executive Officer Girma Wake is expected to present the annual financial report to the Board of Directors.

Girma once said to his employees that he would push the enterprise to the next level by 2010, doubling net profit to a staggering one billion birr.

Ethiopian Airlines was founded in December 1945, initially with the contractual assistance of TWA. The first international scheduled service was inaugurated between Addis Ababa and Cairo on April 8, 1946. It now provides flight connections to 47 destinations around the globe. Currently, EAL has 4,700 employees and transported 1,230,121 passengers in the year ending June 30, 2004.

In related news, 25 marketing students graduated from Ethiopian Airlines' School of Marketing on Tuesday, August 22, 2006.