(Bloomberg) -- Ethiopian Airlines Group said it took only a minor hit from a more than 50% plunge in the country’s currency this year, shielded by income from its international routes.
Africa’s largest carrier saw a “small impact” after authorities floated the birr in July, Chief Executive Officer Mesfin Tasew said Monday in an interview. Losses occurred when “local money in the banks was devalued” and the airline kept domestic ticket prices unchanged as a “social service,” he said, without giving figures.
The effects are limited by the fact most of Ethiopian Airlines’ passengers take international flights priced in dollars, Mesfin said on the sidelines of an aviation event in Cairo, Egypt. Going forward, Ethiopia’s move will likely be a boon for trade and the economy, he added.
The birr has lost 53.6% of its value against the US dollar since the start of 2024, according to data compiled by Bloomberg.
Ethiopia is also moving ahead with its plans to build a new $5 billion airport near the capital, Addis Ababa, that’s set to be the continent’s largest. Authorities have secured the location and are working on planning new homes at another site for farmers who were on the land, Mesfin said.
Ethiopian Airlines suspended flights to Eritrea in early September, the latest sign of deteriorating relations between the two long-feuding neighbors that had reached a rapprochement in 2018. The state-owned carrier has said its bank accounts were suspended, meaning it couldn’t repatriate funds or pay local staff.
In the future, “there is a possibility that we may again reinstate our flight to Asmara, but we don’t know what will happen, when it is going to happen,” Mesfin said, referring to Eritrea’s capital city.
--With assistance from Fasika Tadesse.
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