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Trump Travel Ban Have Little Impact on Ethiopian Airlines’ Travel, Profits

An Ethiopian Airlines plane at the Bole International Airport in Ethiopia’s capital Addis Ababa.  Tiksa Negeri / Reuters

Ethiopian Airlines’ chief executive said a U.S. order temporarily halting immigration from seven Muslim-majority states was creating confusion for passengers but was not having much impact overall on its operations.

Tewolde Gebremariam also said the airline’s revenue rose 10.3 percent to $2.4 billion in the 2015-16 fiscal year, while passenger numbers climbed 18 percent to 7.6 million. Net profit was up 70 percent.

The state carrier is sub-Saharan Africa’s biggest by revenue and has been rapidly expanding with regular plane orders in its bid to become a global player through its increasingly crowded hub in Addis Ababa.

An Ethiopian official said last week that nine Yemenis were deported from America on an Ethiopian Airlines flight after President Donald Trump’s travel ban that the White House says is vital for security but a U.S. judge put on hold.

Yemen, which lies a short distance from Ethiopia, and Somalia, which shares a land border, are among the seven nations on the list whose citizens are affected by the ban.

“It is affecting air travel because people are nervous and confused. There is no clarity in the executive order,” Tewolde said, adding it had led to a few cancellations and refunds by Ethiopian Airlines to passengers.

But he said, “Operationally it has not created any disruption to us, either on our schedule or our customer service.”

He said 2015-16 produced record revenue and net profit, but the airline still faced challenges, particularly in African states where foreign exchange shortages meant it could not repatriate earnings held in local currency.

He said the airline had local currency holdings worth $220 million in Nigeria, Angola, Sudan, Egypt and some other states, but this was losing value as the local currency depreciated, partly because lower oil prices had hit oil-producing economies.

“This is a huge challenge for us,” he said, adding that the issue undermined benefits of an oil price fall during 2015-16.

Falling oil prices in the period had also undermined business from those nations. “We saw tremendous pressure on our revenue from these countries,” he said.

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