Wednesday, December 20, 2023
Today marks a significant milestone for Africa’s aviation sector as the continent’s premier airline, Ethiopian Airlines, unveils a groundbreaking financial deal. Citi is investing $450 million in Ethiopian Airlines for the purchase of three Boeing 737-8 models and two Boeing 777F cargo planes, enhancing the airline’s growth and global reach. This strategic move bolsters Ethiopian Airlines’ fleet capabilities, indicating Citi’s confidence in the airline’s expansion and the development of Ethiopia’s aviation industry.
This major financial boost is being backed by the aircraft themselves as collateral. Orchestrated exclusively by the teams at Citi’s Corporate Banking and Export Agency and Finance divisions, the loan enjoys the backing of the United States Export-Import Bank (EXIM).
Ethiopian Airlines has a deep-rooted relationship with Citi’s Treasury and Trade Solutions (TTS) sector, and their ongoing collaboration has been pivotal in securing this deal. The integrated efforts of various Citi departments exemplify the bank’s comprehensive approach to providing diverse banking services, particularly for clients with international operations.
This financing arrangement, the largest of its kind for aircraft in Ethiopia over the past decade, signifies Citi’s commitment to expand its influence in the region. It also aligns with Ethiopian Airlines’ strategic plans for growth.
The addition of these five aircraft will expand Ethiopian Airlines’ impressive fleet to a total of 150, with all deliveries scheduled to conclude in Washington state, USA, by December. These new aircraft are set to accelerate the airline’s global expansion, enhancing its capacity to serve various destinations worldwide. The acquisition also strengthens Ethiopian Cargo & Logistics Services as the leading cargo network operator in Africa. The airline’s vision includes growing its fleet to over 270 aircraft by 2035.
Ethiopian Airlines Group CEO, Mr. Mesfin Tasew, expressed enthusiasm about the partnership with Citi, emphasizing the loan’s role in the airline’s fleet expansion strategy, which includes adding three B737-8 MAXs and two 777 Freighters. He acknowledged the mutual benefits and the aim to reinforce this successful partnership.
Akin Dawodu, Head of Citi Sub Saharan Africa, remarked on the bank’s long-term association with Ethiopian Airlines, noting the significance of this financing for the airline’s growth. He credited the deal’s success to Citi’s robust international connections and the collaborative effort of the Banking and Treasury and Trade Solutions teams.
Citi’s relationship with Ethiopian Airlines spans 45 years, supporting the airline’s treasury and working capital management needs across 27 countries on five continents. Citi’s global network is set to play a crucial role in supporting the airline’s continued expansion across multiple continents.
Ethiopian Airlines is a key player in Africa’s aviation industry, contributing significantly to Ethiopia’s economic development by promoting tourism and facilitating international trade. The airline has established an extensive network, serving 135 international passenger and cargo destinations, including 63 cities across Africa. Ethiopian Cargo & Logistics Services operates 67 dedicated freighter services with 17 freighter aircraft.
Citi celebrates its 70th year of engagement with Ethiopian clients this year. Since 1953, it has remained the sole U.S. bank offering correspondent banking services in Ethiopia, enabling access to U.S. dollars for Ethiopian corporations and individuals.
Ethiopia is among Citi’s 63 strategically managed global hubs, where the bank, despite not having a physical office, maintains a significant presence and offers a wealth of expertise and resources to its clients.
Tags: Africa, Citi, ethiopian airlines
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