Malawi govt, Ethiopian negotiations still on

Malawi’s Minister of Transport and Public Infrastructure Mohammed Sidik Mia has said Air Malawi (2012) Limited, which has roped in Ethiopian Airlines as a strategic partner, will most probably resume flights in July, subject to concluding negotiations on sticky issues.

Mia told Business News on Wednesday that they are moving at a fast pace to ensure that Malawians start enjoying a reliable and efficient transport service.

“The discussions are centering on how many aircraft the partner will bring, the number of flights to be operational, where they will be going, Air Malawi’s total capital, what assets they have and how they will be disposed of and the work force,” he said.

Mia said the coming onto the scene of the airline will create competition in the aviation industry which could result in exorbitant fares going down.

“South Africa Airways flies to Johannesburg [South Africa] with no competitor and have taken advantage of the situation,” he said.

Ethiopian Airlines was chosen at the preferred bidder in February to be the strategic equity partner of Air Malawi (2012) Limited based on its global experience and competitiveness.

The deal is being facilitated by the Public Private Partnership Commission (PPPC), the body at the centre of the transaction.

PPPC chief executive officer Jimmy Lipunga in an interview said they have put to Ethiopian Airlines the negotiated position of the Malawi Government on various matters for their review and are due to respond by end of this week.

“Sometime next week we are going to present the negotiated position to our authorities. I can also mention that we are negotiating a shareholders’ agreement and a management agreement as is common for any joint venture,” he explained.

Lipunga said the negotiations are proceeding on the basis of utilising the existing bilateral traffic rights available subject to viability assessment, stating that the exact initial routes will be announced after clearing with the government.

As it stands now, Ethiopian Airlines will take up 49 percent equity and government will remain with 20 percent and the other stake [31 percent] will have to be taken up by Malawian investors who can either be individuals or institutions.

Aviation experts earlier said being a reputable airline, the threat of entry into the Malawi market should, by itself, begin to have an impact on fares which will result in a major shift in customer loyalty.

Government through PPPC embarked on a process of identifying a strategic partner to recapitalise national flag carrier and take up equity in the airline.

Ethiopian Airlines is a member of Star Alliance, a global airline network offering customers convenient worldwide reach and a smoother travel experience.