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Ethiopian Airlines reported stout performance during the 2018-2019 fiscal year which the management described as the most challenging year.
Presented the annual performance report in recorded video to employees, Ethiopian Airlines Group CEO Tewolde Gebremariam said that it was a very challenging year. “We lost our beloved staff members and valued customers in the tragic accident of ET302 in March this year. I once again convey my sincere condolence, "he said.
The aftermath of the tragic accident posed series of challenges to the national carrier. Managing the crisis, and the grounding of its B737-800 MAX fleet following the tragic accident has cost the airline direly. As a precautionary safety measure, a few hours after the plane crash, Ethiopian Airlines was the first carrier to ground its MAX planes on March 10, 2019.
Tewolde said the airline had to do with the budgeting of the fleet. B737-800MAX airplanes and lost one in the accident. It pulled five aircraft out of operation.
The second pressing challenge the CEO cited is surge of fuel price. "Our operation cost has significantly increased the price of fuel by 25 percent in the fiscal year," Tewolde said. Currency devaluations in some African countries has cost the airline direly. Funding from these countries has been a daunting task. Local sales ticket sales would fall when changed into US dollars due to currency devaluations.
According to Tewolde, the global economic slowdown has affected the demand for air travel. "Particularly in our continent the passenger and cargo traffic have reduced as a result of the global economic slowdown," he said.
The report of Ebola outbreak in the Democratic Republic of the Congo has also affected passenger traffic influx to the continent. "The international media exaggerated"
The economic slowdown at home triggered by the political instability The report indicated that the weakened export business has reduced the demand for air cargo service.
Despite all the challenges Ethiopian managed to increase its passenger and cargo traffic, revenue and operating profit. The operating revenue increased by 17 percent and available seat by 13 percent. The national flag carrier transported 12.1 million passengers in the year under review, up by 14 percent. Cargo traffic surged by eight percent.
The airline performed 110,220 flights in the budget year and 80 percent of the departed on time, above the global industry average. According to the CEO, 73.3 percent of the passengers are satisfied with the service the airline renders.
The CEO cited the cost reduction program as one of the biggest achievements. According to him, the airline managed to save 145 million USD under its cost reduction initiative. "Our operating profit has increased but the net profit has slightly declined," he said.
The executive management team seems to be satisfied with the performance of the airline. Salary increment proposed by the management effective July 8, 2019.
Ethiopian the financial report is not yet audited.
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