The USA Exim Bank Guarantee provided for Ethiopian Airlines Boeing fleet could be revoked or temporarily suspended!
Posted: 06 Oct 2021, 16:07
As Ethiopian Airlines involvement in the ongoing genocidal Tigray war is being confirmed the following could happen soon:
- The USA could revoke that guarantee that issued for the USA Exim Bank backed financing of those Boeing aircraft that are affected which will immediately increase financing cost for the Airline. The EU backed financing on Airbus aircraft could also be affected.
- Star Alliance could temporarily or permanently suspend Ethiopian Airlines from it's membership with millions of dollar business loss and immediate damage to the brand of Ethiopian Airlines.
- The lease rate for those Ethiopian Airlines aircraft ( about half of it's fleet) that are being operated by Ethiopian Airlines through operating lease arrangement may also increase due to perceived risks with substantial cost increase to the Airline ( Yemen Airlines collapsed after the start of the civil war). Lessors could also ground and re-posses their aircraft whenever they see their risk is going to be high.
- Insurance companies could also increase their costs due to perceived risks
- Business volume may also decrease as Ethiopian Airlines about 70% market is from- to /to -from Africa via it's hub Addis Ababa, the continuation of the civil war ( could also be closer to Addis Ababa) will alarm travellers from flying via Addis Ababa. Definitely the traffic from /to Ethiopia has been already affected due to the ongoing war and it will be more affected as the war get closer to Addis Ababa.
As the conclusion: The above factors coupled with the impact of covid-19 traffic decline for more than a year could force the Airline to huge financial loss and ultimate demise. I call the Abiy government once again to lift the food aid siege on Tigray and immediately start a genuine unconditional peace negotiation with TPLF to save the prominent strategic company of the country. Is appeasing Isaias and the Amhara hard liners more important than Ethiopian Airlines?
- The USA could revoke that guarantee that issued for the USA Exim Bank backed financing of those Boeing aircraft that are affected which will immediately increase financing cost for the Airline. The EU backed financing on Airbus aircraft could also be affected.
- Star Alliance could temporarily or permanently suspend Ethiopian Airlines from it's membership with millions of dollar business loss and immediate damage to the brand of Ethiopian Airlines.
- The lease rate for those Ethiopian Airlines aircraft ( about half of it's fleet) that are being operated by Ethiopian Airlines through operating lease arrangement may also increase due to perceived risks with substantial cost increase to the Airline ( Yemen Airlines collapsed after the start of the civil war). Lessors could also ground and re-posses their aircraft whenever they see their risk is going to be high.
- Insurance companies could also increase their costs due to perceived risks
- Business volume may also decrease as Ethiopian Airlines about 70% market is from- to /to -from Africa via it's hub Addis Ababa, the continuation of the civil war ( could also be closer to Addis Ababa) will alarm travellers from flying via Addis Ababa. Definitely the traffic from /to Ethiopia has been already affected due to the ongoing war and it will be more affected as the war get closer to Addis Ababa.
As the conclusion: The above factors coupled with the impact of covid-19 traffic decline for more than a year could force the Airline to huge financial loss and ultimate demise. I call the Abiy government once again to lift the food aid siege on Tigray and immediately start a genuine unconditional peace negotiation with TPLF to save the prominent strategic company of the country. Is appeasing Isaias and the Amhara hard liners more important than Ethiopian Airlines?