International Finance

Ethiopian Airlines shows interest in South African Airways

Ethiopian Airlines South African Airways
South African Airways is looking for outside investments as the company is running losses since 2011

Ethiopian Airlines has shown interest in South African Airways (SAA) as the embattled state-owned carrier has opened up to the possibility of outside investment, local media reported.

South African Airways is looking for outside investments as the company is running on a loss since 2011.

Reportedly, state-owned Ethiopian Airlines is considering buying a stake in South African Airways. The airline

According to the local media, South African President Cyril Ramaphosa told the Financial Times Africa Summit in London, “South African Airways is one of those state-owned enterprises that has relied on lots of state bailouts. We are on record as saying we are open to the participation of the private sector. As we speak now, we’re talking to a few interested parties when it comes to South African Airways.”

But according to Tewolde GebreMariam, group chief executive officer of Ethiopian Airlines, the two airlines did not have any constructive discussions which would suggest a potential stake buy. However, he stressed that if South African Airways is to approach with an offer, Ethiopian Airlines would consider it.

The two carriers did hold discussions regarding a potential deal when South African Airways‘ former CEO Vuyani Jarana was still in charge. But since he resigned earlier in the month of May, the discussions have stalled.

Ethiopian Airways’ decision to invest in South African Airways could be a part of its broader plan to save aviation in Africa. African carriers collectively accounted for 60 percent of African market share two decades ago but now only account for 20 percent.

Tewolde GebreMariam believes it would be disastrous for aviation in Africa if the market share decreases any further.

Over the last decade, Ethiopian Airlines has established itself as the largest carrier in the continent. The carrier has seen a 14 percent increase in passenger capacity so far this year.

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