Viewpoints | Mar 18,2023
A regulation that will liberalise the aviation industry is in the making and has reached the Office of the Attorney General for legal review.
Drafted by the Ethiopian Civil Aviation Authority, the draft regulation is expected to relax investment bottlenecks in the air transport sector, including lifting the 50-seat limit on private aircraft.
If approved by the Council of Ministers, the bill will enable citizens to participate in domestic and international flight operations, maintenance and aircraft repair, consultancy service, aircraft design and manufacturing, education and training, import, distribution and leasing of aircraft parts.
Non-national investors will also be allowed to engage in the aviation sector through full ownership, except in the case of domestic and international flights. In the latter case, they will be required to enter into partnerships with either Ethiopians or members of the Ethiopian diaspora with a maximum equity limit of 49pc.
The minimum capital requirement for non-national investors will be 200,000 dollars and 150,000 dollars for joint venture with domestic investors. The Authority has three main directorates: Aviation Regulation, Air Navigation Service and Support Service.
The new regulation provides broad opportunity for nationals and members of the Ethiopian diaspora to invest and play a significant role in the economy of the country, according to Endeshaw Yigezu, air transport director at the Authority, who has been with the agency for the last 15 years.
“With more than seven decades of history of air service, we still have only one globally competent airlines and everything is controlled by the government,” he told Fortune. “The government could not survive by intervening in capital intensive markets where every resource requires foreign currency.”
Ethiopia, which has been a member of the International Civil Aviation Organisation (ICAO) since 1952, has 16 private investors operating in the air transport sector. The companies engage in consultancy, aviation training, domestic flight operation, flight facilitation and cargo handling.
Dawit Gebreigziabher, a well-known investor and aircraft business pioneer who is running National Airlines, said that the investment proclamation that limited investment in aircraft with less than 50 seats has been in contradiction to free market principles.
“We have been able to discuss the issue with the Authority, and we are hopeful it would be one of the roadblocks that are addressed,” he said.
The major player in the industry is the state-owned Ethiopian Airlines that operates with a fleet of more than 100 aircraft, serves six million passengers a year and reported 2.6 billion dollars in revenue in 2017.
Ahmed Kellow (PhD), the former CEO of Ethiopian Airlines and general manager of First Consult, agrees that it is a good idea to expand access to local and foreign investors.
But most of the areas opened for investment require large-scale capital and state of the art technology that makes them more suitable for well-established and recognized airlines, according to Ahmed.
“For local investors to venture to companies that offer consulting, education and training; as well as invest in domestic flights, presents good opportunities to enter the industry and grow,” Ahmed told Fortune.
The nation has an adequate skilled workforce to fill the demand in aviation management and maintenance, he added.
PUBLISHED ON Feb 23,2019 [ VOL 19 , NO 982]
Viewpoints | Mar 18,2023
Commentaries | Mar 23,2019
Editorial | Feb 16,2019
Radar | Mar 20,2021
Radar | Jul 08,2023
Agenda | Aug 27,2022
Radar | Dec 12,2023
Radar | Feb 03,2024
Commentaries | Apr 29,2023
Fortune News | Mar 28,2020
Feb 24 , 2024 . By MUNIR SHEMSU
Abel Yeshitila, a real estate developer with a 12-year track record, finds himself unable to sell homes in his latest venture. Despite slash...
Feb 10 , 2024 . By MUNIR SHEMSU
In his last week's address to Parliament, Prime Minister Abiy Ahmed (PhD) painted a picture of an economy...
Jan 7 , 2024
In the realm of international finance and diplomacy, few cities hold the distinction that Addis Abeba doe...
Sep 30 , 2023 . By AKSAH ITALO
On a chilly morning outside Ke'Geberew Market, Yeshi Chane, a 35-year-old mother cradling her seven-month-old baby, stands amidst the throng...
Every country is eager to attract foreign direct investment (FDI) – and for good re...
Leaders of the National Election Board are in a charm offensive mood, of a sort. Last week, they organised a rare tour for members of the me...
When the country's most senior diplomats and envoys return back to their posts after two-week debriefings, they leave behind a point or two...
Feb 24 , 2024
The recent policy pronouncement by the Transport Minister, Alemu Sime (PhD), of a pla...
Feb 17 , 2024
In the vast auditoriums of Addis Abeba, far from the era when flamboyant figures like...
Feb 10 , 2024
In a last week session before Parliament, Prime Minister Abiy Ahmed (PhD) was seen ad...
In a world increasingly attuned to the nuances of data reliability and its implicatio...
During a work deployment abroad five years ago, I encountered a woman whose frailty w...
I am greeted by the sight of numerous women lining the streets upon returning home from work each day. Their offerings range from fresh prod...