Ethiopian and Kenya Airways’ financial fortunes diverge in pursuit of East African domination

Ethiopian has gained the early upper hand over its neighbouring rival Kenya Airways in the race to become the biggest carrier in Africa over the next decade or so. Both airlines launched ambitious, once in lifetime, growth strategies since the Global Financial Crisis (GFC) which they hope will deliver dominance over the other and their geographically advantaged East African hubs.

Ethiopian came through the GFC relatively unscathed and with its record of 12 consecutive years of profits intact. The carrier stated in Jul-2013 that it expects to report a record profit for 30-Jun-FY2013 driven by a 20-25% increase in revenue and passenger numbers, despite disruption caused by the three month grounding of the 787-8 fleet due to issues relating to the aircraft's batteries.

In contrast Kenya Airways slumped to a USD92 million loss after tax in the financial year ended 31-Mar-2013, as the European economic downturn drags on and geopolitical uncertainty surrounded a number of general elections in Africa, including in Kenya, which caused a sharp drop in demand.