Number Of Planes: Why Boeing Chose Ethiopia Over Kenya For Africa Headquarters

On Tuesday, May 28, American multinational aerospace company, Boeing, picked Ethiopia as the location for its African headquarters, at the expense of the likes of Kenya and South Africa which have been well-known countries in the continent's aviation industry.

The leading manufacturer of commercial jetliners and defence announced intentions to open African offices in Addis Ababa, the administrative and commercial capital of the East African country.

"Boeing is set to open its African headquarters in Ethiopia, putting an end to speculation about Kenya or South Africa being the preferred locations for expansion. In 2023, Ethiopia and Boeing entered into a joint venture to manufacture some aeroplane parts in Ethiopia," a statement as reported by DW Africa read in part.

"Boeing anticipates that African carriers will need over 1,000 new jet aircraft within the next 20 years, with 80% of these deliveries aimed at expanding the existing fleet. What do you think of Boeing choosing Ethiopia as its Africa headquarters?"

President William Ruto in Addis Ababa, Ethiopia, where he will hold bilateral talks with Prime Minister Abiy Ahmed Ali on Thursday, October 6, 2022. /PCS

The move however sparked conversations within the circles of aviation as well as tourism as some felt that the prominence in Kenya in terms of aviation meant that it was better-placed to host the international company.

However, businessman and veteran hotelier, Mohammed Hersi on Sunday, June 2 questioned Kenya's entitlement as well as South Africa given that both countries have had challenges running their national airlines.

"SAA only exists on paper while KQ was pushed into a hole and current MD and Chair have been struggling to lift KQ out of the deep rat hole. 20 years ago, Ethiopian was nowhere but today their fleet of Dreamliners, 39 is almost equal to our entire fleet at KQ," he stated in part on X.

According to Hersi, Ethiopian Airlines is arguably Boeing's biggest client in East Africa, hence the decision to set up a base in the country. In March, the airline became the company’s first African customer for the Boeing 777X. Also, it placed orders for 11 Boeing 787 Dreamliners and 20 Boeing 737 Max planes in 2023, despite the aerospace company’s recent challenges.

Comparing Nairobi to Johannesburg, Hersi noted that the former was in a better position than the latter, which he termed  "a non-starter and location does not even favour them."

Turning to national carrier Kenya Airways, Hersi claimed that most of the airline's numerous delayed flights result from a Collective Bargaining Agreement (CBA) among its pilots, who fly fewer hours than their counterparts globally.

"The worst part is KQ can never dare employ foreign pilots since that again is captured in the lopsided CBA. Well, it's even a miracle that my friend Allan Kilavuka (CEO) has kept KQ afloat. I don't envy his position," he added.

He called for both countries to get their act together regarding their flagship airlines, adding "Yours truly is choosing to remain an optimist that of the 1,000 aircraft by Boeing 100 should be for KQ."

Boeing is a leading aerospace company that designs, manufactures and services commercial planes. In the past year, the company delivered 528 commercial aeroplanes and received 1,576 net orders. The company is estimated to have a market capitalization of Ksh14 trillion (USD107 billion) as of May 2024.

The company projects that African carriers will require an estimated 1,030 new aircraft in the next 20 years to uphold international standards.

With the recent move, Ethiopia gained a significant reputation as a key diplomatic hub in the continent as it already hosts the African Union's (AU) headquarters.

Further, Boeing and Ethiopia Airlines had signed a strategic Memoranda of Understanding (MoU) to enhance airline operations and develop four key areas: Industrial development, advanced aviation training, educational partnership and leadership development.

On the other hand, Kenya has a history of working with Boeing, including securing orders for aircraft and landing gear exchange services in 2022 to enable more cost-effective operations.

Boeing currently serves nearly 70 per cent of the aeroplane market in Africa as over 60 airlines operate about 500 Boeing aeroplanes.

Kenya Airways and Ethiopian Airlines planes at Kamuzu International Airport in Malawi. /BUSINESS DAILY