Ethiopian Seeks USD 424 Million Loan for Airbus Aircraft Purchase

Ethiopian Seeks USD 424 Million Loan for Airbus Aircraft Purchase

By Kayleyesus Bekele

The national flag carrier of Ethiopia, Ethiopian Airlines, is looking for USD 424.5 million loan to finance the delivery of 12 Airbus 350-900 aircraft.

The management of Ethiopian Airlines placed firm orders for the purchase of 12 Airbus 350XWB in 2009. The order was confirmed at the 2009 Dubai Air show. Ethiopian - a reliable customer of Boeing for over six decades - ordered Airbus aircraft for the first time. The national flag carrier operates an all Boeing long-haul fleet.

Nega Mekonnen, chief financial officer of Ethiopian, told The Reporter that Ethiopian last week issued a request for proposal for the pre-delivery payment financing usually called in the industry (PDP Financing) required as an advance down payment for the purchase of 12 A350-900 aircraft. According to Nega, the amount of the loan is around USD 424.5 million.

The total listed price of the 12 A350s is 2.9 billion dollars. The new jetliners are scheduled for delivery between 2017 to 2019. Ethiopian has also leased two A350 that will arrive Addis Ababa in May and June 2016. A350XWB is Airbus new product that made its maiden flight in June 2013.

Powered by the Rolls Royce Trent Engines, the Airbus A350XWB is known for its specious cabin. The new jetliner is a rival of the Boeing B787 Dreamliner aircraft. The A350 family has 800, 900 and 1000 versions with 250-350 seats.

Qatar Airways is the launch customer. Ethiopian Airlines is the first carrier from Sub-Saharn Africa to order the A350 aircraft at the Dubai Air show in 2009.

Tewolde Gebremariam, Ethiopian Airlines Group CEO, told The Reporter that he hopes that the A-350 will deliver all what was promised by Airbus when Ethiopian placed the order. "The fleet will play an important role in our fast, profitable and sustainable growth strategy. The airplane's seat capacity will be slightly bigger than our B-777-200LR fleet but it will have shorter range. We expect quantifiable unit operating cost reduction. It will have an amazing cabin interior features for our customers. Hence; we are looking forward to take delivery and operate it in our system in 2016," Tewolde said.

Currently, Ethiopian operates 80 aircraft. The airline plans to double the number by 2025. The airline is implementing a 15 year strategic plan dubbed Vision 2025 aimed at making Ethiopian a leading aviation group comprising of seven profit units. The airline anticipates to own 150 aircraft, serve 92 international destinations and transport 18 million passengers by 2025.