Commission Bemoans Ethiopian Airlines Share Acquisition

Public Private Partnership Commission (PPPC) has described as abnormal Ethiopian Airlines’ move to acquire 45 percent business stake in Zambian Airways.

News of the twist in the business venture spread out on the international media about three weeks ago, catching Malawian aviation officials unaware.

Ethiopian Airlines has 49 percent business stake in Malawian Airlines, an agreement brokered through the Public Private Partnership - PPP agreement in 2013.

And PPPC Chief Executive Officer, Jimmy Lipunga told local media they are seeking an explanation from the Ethiopian Airlines on their stand in regard with Malawi.

 “It is not normal to have an investor invest in two neighboring countries. So, I am just keen to find out the rationale behind this. The PPP Commission will definitely have to engage with the board of directors and the Malawi government as a shareholder,” said Lipunga.

“I also hope the Ethiopian Airlines will do more awareness to the public as well as explain what this means to Malawi especially to the people who use their airline,” added Lipunga.

However, Malawian Airlines Chief Executive Officer Hailemelekot Mamo has advised people to separate the two business ventures.

“These two are completely different programs. Malawian Airlines is under a different contract and it has always been said it would be a hub and will continue to operate as such. You have to remember that in East Africa, Ethiopian Airlines and Kenya Airways are neighbors but each of them has an independent airline. Therefore, the strategy will continue for Malawian Airline,” said Mamo.

He also added: “Many airlines operate on similar routes, this does not mean they will have to share a market, it means they will develop their own market using their out-points.”

Ethiopian Airlines Group CEO Tewolde Gebremariam, was quoted in the East African media as having said the new venture would enable the travelling community in Zambia and the Southern African region “to enjoy greater connectivity options, thereby facilitating the flow of investment, trade and tourism, and contributing to the socio-economic growth of the country and the region.”

According to the PPP Commission CEO Lipunga, in the Malawian and Ethiopian Airlines deal, the Malawi government invested US$10.2 million in cash while US$9.8 million was invested by their Ethiopian counterparts in aircrafts and maintenance.