Ehiopian and Malawian Arlines Joint Venture
Ehiopian and Malawian Arlines Joint Venture

A senior Malawian government official has criticized the deal in which that country’s government entered into a joint venture with Ethiopian Airlines to operate Malawian Airlines.

And some Malawian Members of Parliament have continued questioning the relevance of the joint venture deal between the country’s national flag carrier and Ethiopian Airlines.

Zambia has become the second country in the SADC region to partner with Ethiopian Airlines, the first being Malawi in which the Malawian government holds a 51% stake with Ethiopian controlling a 49% stake.

The Head of Malawi’s Public Private Partnership Commission (PPPC), Jimmy Lipunga, told The Nation Newspaper recently that despite initial promise on its launch four years ago, Malawian Airlines had yet to reach breakeven.

“The business model that was floated during the tender indicated that the airline would be making profits by the second year, but the reality on the ground has been different as the airline has struggled to gain the market share that is needed to make profits,” he said.
Under the PPPC’s original plan, the Malawian government would have offered up a 20% stake in the carrier to Malawian citizens once it turned profitable.

That way, effective ownership of the airline would have remained in Malawian hands despite government’s retreat.
Malawian Airlines currently operates one B737-700 and one Q400 on scheduled flights to seven destinations in Malawi, Zimbabwe, South Africa, Mozambique, Tanzania, and Kenya.

And some Malawian Members of Parliament have continued questioning the relevance of the joint venture deal between the country’s national flag carrier and Ethiopian Airlines.

The MPs say the deal does not benefit Malawi adding that Malawian Airlines has not seen an improvement in its services since the deal was inked.

Member of Parliament for Nkhata Bay Central Ralph Mhone recently questioned the partnership between Malawian Airlines and Ethiopian Airlines describing it as not beneficial to Malawians.

Speaking during question time when legislators get responses from government through questions to Ministers, Mhone said that there are little or no benefits for government in a number of Public-Private Partnership (PPP) that it signs.

He said it is very important that when government signs Public Private Partnership agreements particularly those that have international implications, the country should believe to honour those agreements.

“The government has been signing a lot of Memoranda of Understanding under PPP but it seems it is not getting any benefits.

“For instance, we have the Malawi-Ethiopian Airlines partnership which has been in operation for some time. Surprisingly, we have never been informed about the dividends we are getting from the deal,” Mhone said.

Mhone, a lawyer by profession, said the country should be honouring its own law because “the aim of that particular law is that we must foster investment into this country.”

And outspoken Malawi Congress Party (MCP) Dedza East member of parliament Juliana Lunguzi has argued that there should be a review of the joint venture of Malawi government and Ethiopian Airlines on Malawian Airlines, saying it is not benefiting the country.

Ms. Lunguzi said in Parliament in her contribution the President Peter Mutharika’s State of the Nation Address (Sona).

She asked government to submit a report outlining the benefits of the country.

“We need a report from the Minister of Transport and Public Works on how much this country has benefitted from Malawian Airlines,” said Ms. Lunguzi.

“We need this report because some of us have received reports that the deal is not benefitting Malawi. Now, if Malawi is not benefitting, why do we still need it?”

Under the terms of the agreement, Ethiopian Airlines hold a 49 per cent shareholding in the start-up carrier with the remaining 51 per cent equity in the hands of the Malawian Government and Malawian private investors.

Through this strategic partnership, Ethiopian and Malawian Airlines offer harmonised flight schedules so as to provide seamless and best connectivity options for travelers within, to and from the Southern Africa region.

Last week, Zambia’s Transport and Communications Brian Mushimba announced that government expects Zambia Airways to commence operations in time for the country’s 54th Independence Day celebrations due on October 24, 2018.

The carrier will be a joint-venture with Ethiopian Airlines and will be allocated USD30 million from the 2018 national budget for its first year of operations.

Earlier this year, Ethiopian Airlines’ CEO Tewolde Gebremariam said Zambia Airways would likely operate a combination of Dash 8-400 and B737 NextGen equipment.

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37 COMMENTS

  1. Who is the author of the article?

    Why are you hiding your credentials?

    Are you sure u are comparing “like”with “like”?

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    • If you throw a stone at a bunch of tongas , the probability that it will hit a upnd member is?
      A. 1
      B. 0
      C. 100%
      D. A and D.

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    • If you throw a stone at a group of theives the probability that it will hit a bemba is..

      A. 1
      B. 0
      C. 100%
      D. A and D.

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    • If you throw a stone at a group of theives the probability that it will hit a bemba is..

      A. 60%
      B. 70%
      C. 100%
      D. A and D.

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    • Malawians are generally slow in mind.
      Zambians are craft in all areas.
      Mulusa will run the airways.

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    • Aviation is one of the most complicated industry. Ethiopian airline is making it for now by offering low cost fares and it seems the long term strategy is to control Africa market through indirect monopoly. I personally believe Zambia doesn’t need its own national airline.

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  2. Why does Malawi keep coming into Zambia’s economic ventures> Remember the Maize marketing saga-Dora Siliya and Koswe should have been found wanting! Now the airline (Zambia airways-Ethiopian airline and Malawian airlines converging) business coming in with another dynamic. What is Koswe up to.

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  3. Ethiopian Airlines are a rare success African Aviation story. We have seen how Botswana has benefited from its diamond mining. They have done it through a partnership with Debeers (DeBotswana). That partnership has held, benefiting both. In Zambia, the story has been different. May be we can learn something from Botswana.

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    • The is nothing we can learn from Botswana…. honestly to you expect a country to move anyway with a president who spent is live drinking beer in a compound? You are asking for too much. Do as a favour get us Lungu’s cv then we can have a chat

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    • You are comparing airline business to diamond mining…really laughable…go to Serria Leone where diamonds are fond on the surface and ask about the prices!!

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    • Jay Jay, Sierra Leone, despite its diamonds, is the poorest country in the world. Botswana is one of the most affluent. There lies the difference. There is mining in Zambia from which the country has not benefited to the level of Botswana’s. Aviation in Africa is a growing industry, albeit only the fittest can survive and reap the benefits. Ethiopian Airlines is already a success story. They have what it takes to succeed. Few other countries in Africa can compare. You surmise this is “laughable.’ Really?

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    • @Meimatungu – What am talking about is product given that De Beers controls most of the market the last thing they would have wanted is a producer flooding the market with cheap product. As for the diamonds in West Africa they are spread across a wide surface area uneconomical for a big mining company to invest. As I always state there is simply no need for us to invest in national airline for the sake of pride…this is a dog eat dog industry.

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  4. HH Oval head

    Insulting Tongas is not a solution at all, let us all try to bring innovative products and export to other countries so that we make more money for our country called Zambia.Stop insulting one another, Mr Oval head if you are christian just concentrate bringing up new ideas, what you are busy doing insulting Tongas it will not take our country anywhere.

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    • Peace maker
      HH oval head is not insulting tongaz, he is simply expressing his speech freedom like pilato. by the way the answer to his question is zali.

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    • If you throw a stone at a group of theives the probability that it will hit a bemba is..

      A. 80%
      B. 90%
      C. 100%
      D. A and C.

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    • Bemba s are everywhere. In short you’re talking about nalumango or gbm. You see its only tongas who are found 100% upnd and not vice versa. Try to mix with others badala.

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  5. that’s what zambia should have done…. do research and homework. look at other similar business ventures, see how they’ve performed, notwithstanding the differences between Malawi and Zambia, it would give us something to work with.
    Zambian politicians in the ruling party are so freaking useless. they don’t do nothing, just sit there and get fat. they don’t even oppose the obvious wrongs to right the many flaws that even a grade 5 can see.
    what a shame and a waste of resouces

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    • I’m sure both partners did enough research before entering the agreement. Why else would the Ethiopians sign another joint venture with yet another southern African country if the deals are not beneficial?

      Fact is that Lusaka is better positioned to become a Southern African hub for regional and inter-continental routes than Lilongwe.

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    • You are making assumptions that there was no research because the venture it has failed in Malawi then it will fail in Zambia. Yet the article is clear that almost all the PPPS in that country are failing. We need to compare many factors. Why are we not talking about the seemingly success story of Air Bostwana in a similar venture? Kenya Airways with KLM.

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  6. Don’t expect an overnight profit from airlines that have been dead for decades! Ethiopian Airlines is a major proven player in the airline industry that have showed results after results. Have patience and it will pay off, there has to be more cooperation between African countries as long as it’s a win win situation for both countries. If this was an European airline that took over, there wouldn’t be an uproar like this! Wake up Africans!

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  7. This is misguided Nationalism. South African , Malawi, Zimbabwe Airways etc are all making loses. Even the Lungu/Zambia Airways will be making loses and Treasury will have to sudsidise its operations. It is more productive to subside Agriculture than Air Travel or better still use the subsidy money to improve education and health facilities. The PF ?oswe Mumpoto President and his criminals do not see this. Anyway how can they see this when the Koswe Mumpoto President says he is visionless.

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  8. Airline eyo tulefwaya.Lungu eotulefwaya. Shonongo takatekepo iyoo. When ecl leaves office, ck will be next ruler.After ck it will be kalaba followed by Lubinda and next will be tutwa.

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