Ethiopian aviation sector set to grow 226% by 2037: IATA

March 05, 2020: The International Air Transport Association’s (IATA) recent study on the importance of air transport and tourism to Ethiopia revealed that the sustained prioritisation of air transport, connectivity, and tourism as a strategic asset, would support an additional 900,000 jobs and at least $9.3 billion of gross domestic product (GDP) by 2037. If current trends persist, Ethiopia’s air transport market will expand by 226 percent over the next 20 years, with annual passenger journeys increasing from 7.2 million in 2017 to 23.5 million a year by 2037. 

The study presented in Addis Ababa identified air transport and tourism as significant economic enablers. Air transport and foreign tourists arriving by air currently support 5.7 percent of the nation’s GDP valued at $4.2 billion and about 1.1 million jobs.  Addis Ababa airport is also the base of the Ethiopian Aviation Academy.

IATA identified four areas where Ethiopian government action can further promote aviation’s growth and bring even more value to the country:

• Implement the Single African Air Transport Market (SAATM): Ethiopia's commitment to SAATM is positive for African aviation. The government’s ongoing efforts to increase SAATM adoption among other Africa states will provide a significant boost for aviation in Ethiopia and throughout the continent. 
• Ensure future infrastructure investments maximise the economic and social benefits of connectivity:  Much needed infrastructure capacity for Ethiopia was provided by the opening of the second terminal at Addis Ababa Bole International airport. For the country to retain its competitive position, future infrastructure investments should align with industry growth, be demand-driven, fit for purpose and deliver required service levels at acceptable costs for users.
• Blocked funds: Airline funds blocked from repatriation in Ethiopia stand at $70 million. The government should continue working with the industry on ways to make these withheld funds available. Airlines need to have confidence that they will be able to repatriate their revenues to allow the full benefits of aviation to be realised. 
• Improve air cargo facilitation: Ethiopia’s facilitation of air cargo through its customs and borders regulations ranks 86th out of 124 countries in terms of the worldwide Air Trade Facilitation Index (ATFI) and 42nd out of 135 countries in terms of the eFreight Friendliness Index (EFFI) globally. By implementing policies facilitating the frictionless movement of air cargo the country will be able to strengthen its position as a leading cargo hub for East Africa.

"The Ethiopian Government’s recognition of air transport as a key driver of the country’s economic growth has paid significant dividends.  Economic, political and regulatory reforms, aimed at energizing and transforming the economy from a state-led to market-based growth, with stimulants such as the recently-introduced “Visa on Arrival” process, are bolstering Ethiopia’s importance as a major East African air transport hub,” said Raphael Kuuchi, IATA’s special envoy to Africa on Aeropolitical Affairs. 

“Ethiopia’s continued prioritisation of air transport along with the four government interventions IATA is proposing, will help the country’s air transport and tourism market achieve the 226 percent forecast growth and in doing so, unlock even greater socio-economic opportunities for the country,” said Kuuchi. 

Meanwhile, the fifth edition of Aviation Africa made its debut in Addis Ababa. Some 600 delegates from 70 countries, 32 of which represented African nations, joined more than one hundred exhibitors, despite the travel limitations resulting from the coronavirus threat. 

Tewolde GebreMariam, CEO of Ethiopian Airlines Group highlighted the current coronavirus challenge, which was a trending theme at the conference, discussing what it means to the aviation industry. “Coronavirus is a huge challenge. We are seeing a 20 percent decline in demand. However, we are used to these kinds of shocks and we have the experience to overcome this. For us this is a temporary problem, we have faced disease, natural disasters, and sudden spikes in oil prices, and we have the capabilities and skill to recover.”