ADDIS ABABA, Ethiopia (AP) ? A merger proposal made last month by the chief executive of Kenya Airways was considered but is not practical, a senior Ethiopian Airlines official said Thursday.
Kenya Airways Chief Executive Titus Naikuni told an aviation conference last month that his airline, Ethiopian Airlines and South African Airways should consider merging. Naikuni said the three small airlines won't be able to compete on their own in coming years.
Yissehak Zewoldi, a vice president with Ethiopian Airlines, told The Associated Press on Thursday that the advantage of increased scale would be positive but that a merger is not likely.
"Big is always good. You can achieve better results in competitiveness and cost reduction by working together, so the merger idea is theoretically good and we looked at the idea," Zewoldi said as the airline celebrated its one-year membership in the Star Alliance.
"But it won't go beyond that. Its practicality is highly doubtful," he said.
Zewoldi said one top stumbling block is that Ethiopian Airlines and Kenya Airways belong to competing global alliances. Kenyan Airways is a member of SkyTeam. South African Airways belongs to the Star Alliance.
After Naikuni's proposal, the Centre for Aviation showed how a South African-Ethiopian-Kenyan airline would rank compared with other large carriers. The three airlines combined would have a capacity of 650,000 seats weekly, it said. By comparison Delta has 3.7 million weekly seats, Lufthansa has 2.7 million weekly seats, and Emirates has 1 million weekly seats, the Centre for Aviation said.
Ethiopian Airlines currently flies to 70 international destinations spanning four continents with 54 airplanes, including four Boeing 787 Dreamliners.
Source: http://news.yahoo.com/ethiopian-air-says-kenya-air-merger-not-practical-144749548--finance.html
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