Ethiopia is now facing mounting pressure from foreign airlines following a prolonged dispute in Nigeria, centered around a frozen fund of $95 million. While this amount is relatively small compared to the over $800 million stranded in Nigeria, the airlines are emphasizing that the consequences for Ethiopia could be equally severe, mirroring the challenges faced by Nigeria.

The International Air Transport Association (IATA), representing the airlines, emphasized the importance of adhering to international agreements that guarantee the repatriation of revenues. This ensures that the world remains interconnected through air travel.

During the recent Focus Africa session in Ethiopia, IATA highlighted the country's robust recovery from the COVID-19 crisis. Ethiopia's regional connectivity, as measured by IATA's Connectivity Index, has reached 113 percent of pre-crisis levels, demonstrating significant progress.

In the first quarter of 2023, passenger traffic originating from Ethiopia surpassed pre-crisis levels by 19 percent, surpassing the overall passenger demand in Africa, which was 8.7 percent above pre-crisis levels during the same period.

According to Willie Walsh, the Director General of IATA, the Ethiopian Government and Central Bank's limited allocation of foreign currency, specifically U.S. dollars, has resulted in the blocking of $95 million in airline funds within the country. This situation sends negative signals and jeopardizes the economic and social benefits that Ethiopia's global hub contributes to the country's development. Walsh emphasized the importance of Ethiopia adhering to the global rules it benefits from and called for swift cooperation between the government and the industry to resolve this issue.

On the other hand, Mesfin Tasew, the CEO of Ethiopian Airlines Group, expressed confidence in the airline's performance. Tasew stated that the current indicators demonstrate strong success and recovery from the pandemic's impact. The airline anticipates generating $6.1 billion by the end of the fiscal year, representing a 20 percent growth compared to the previous year. Furthermore, Ethiopian Airlines expects to transport 13.7 million passengers, marking a significant 55 percent increase compared to the same period last year.

Addressing the ongoing challenges faced by Ethiopian Airlines, the spokesperson stated that despite the airline's persistent operations and achievements, difficulties persist in repatriating accumulated funds from various countries. Currently, there is a significant sum of over $180 million stranded in multiple nations, highlighting the critical challenge airlines face in transferring funds.

In addition to addressing fund repatriation, it is crucial to prioritize the implementation of the Single African Air Transport Market (SAATM) as part of the efforts to bolster the aviation sector in Ethiopia.

Prior to the pandemic, the Single African Air Transport Market (SAATM) was envisioned as the solution to facilitate travel within the African continent. Although 23 countries have signed the Memorandum of Implementation, none have yet ratified it. The full implementation of SAATM continent-wide would yield substantial economic benefits. In Ethiopia alone, it has the potential to generate 21,000 new jobs and contribute $81.8 million to the GDP.

To further the growth of a Sustainable Aviation Fuel (SAF) industry, which plays a crucial role in reducing the aviation sector's carbon footprint and aligns with the industry's commitment to achieving net-zero carbon emissions by 2050, IATA has urged the Ethiopian government to explore the development and incentivization of SAF production. This proactive approach can contribute significantly to meeting sustainability goals.

With its abundance of unique feedstocks, expansive land area, and significant solar potential, Ethiopia possesses the potential to emerge as one of the largest producers of Sustainable Aviation Fuel (SAF). This opportunity extends to various feedstocks such as biomass, as well as renewable non-biomass sources like solar and wind power-to-liquid (PtL) solutions.

The aviation industry in Ethiopia is projected to triple by 2040, with an anticipated average growth of six percent in passenger traffic over the next 17 years. Recognizing this potential, the Ethiopian government is in a prime position to stimulate SAF production. By embracing this opportunity, not only can Ethiopia support the predicted surge in air travel, but it can also catalyze significant job creation and foster a boost in the local economy. Taking the lead in sustainable aviation, Ethiopia has the potential to construct an aviation future that is both environmentally conscious and prosperous, as emphasized by Walsh.