12/07/2024, 16:08 Under-fire Boeing Hoping for Clear Skies in African Aviation Future - The Reporter Magazine

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Under-fire Boeing Hoping for Clear Skies in African Aviation Future

by Bewket Abebe — July 1, 2024

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Despite lagging behind global air transport levels, Africa’s aviation industry is experiencing a clear upswing. The latest report from the
African Airline Association (AFRAA) indicates record highs in both revenue and passenger capacity in January 2024. This is a significant
milestone for a sector still recovering from the devastating impact of the COVID-19 pandemic. In this vast market of 54 nations, US aircraft
manufacturer, Boeing, holds a significant market share.

Boasting roughly 500 airlines, Africa’s commercial aviation sector is heavily reliant on Boeing, with the manufacturer accounting for around
70 percent of the active aircraft market. The plane maker sees strong demand in the continent, forecasting over 1,000 new jet deliveries to
African airlines in the next twenty years.

To further solidify its presence in Africa, Boeing has announced the opening of its office in Addis Ababa, home to one of its largest
customers and long-standing partner, Ethiopian Airlines.

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Ethiopian Airlines and Boeing solidified their long-standing partnership in 2021 with a strategic agreement focusing on four key areas.
Boeing currently holds a major share of Ethiopian’s fleet, with over half composed of their aircraft, including 29 of the latest 787
Dreamliners and 15 of the infamous 737 MAX. The partnership was further strengthened on March 5, 2024, when Ethiopian signed a
memorandum of understanding with Boeing to acquire 20 new airplanes, including the 787 Dreamliner, 777X, and 737 MAX.

However, safety concerns linger, particularly regarding Boeing’s 737 MAX fleet. The tragic Lion Air and Ethiopian Airlines crashes in October
2018 and March 2019, respectively, claimed 346 lives of different nationalities. More recently, an incident involving an Alaska Airlines 737
MAX 9 flight raised fresh safety concerns for the model.

These safety incidents have undoubtedly impacted Boeing. In the first quarter of
2024 alone, the company reported a net loss of USD 355 million.

In an effort to navigate the African market, Boeing appointed Anbessie Yitbarek, who previously held leadership positions at Ethiopian
Airlines, as Vice President of Commercial Sales and Marketing for Africa in January 2023.

The Reporter’s Bewket Abebe approached Anbessie to learn how the company plans to address safety concerns and navigate the growing
African market, among other questions. EXCERPTS:

The Reporter Magazine: The African Aviation Safety and Operations Summit staged last month here in Addis highlighted ‘Championing
African Aviation Safety’ as a theme. From your perspective, what are the major safety and operational challenges facing African airlines?
How does Boeing contribute to addressing these challenges and promoting a culture of safety?

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Anbessie Yitbarek: Factors hampering Africa’s aviation industry include a poor safety and security record, inadequate resources and
infrastructure, distance and limited connectivity, lack of regulation, and government actions. These constraints, along with competition and
high operating costs, pose significant challenges.

The continent also struggles with implementing and enforcing internationally

accepted safety standards and practices.

We are working closely with airlines to improve safety performance by providing

mitigation tools for major identified risks.

So far, we have assisted many African countries in obtaining FAA Cat 1 status and have contributed to regional safety initiatives through the
regional aviation safety group and by co-producing the annual safety report.

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How would you assess the current state and future potential of the African aviation market? In your view, what are the most significant
trends impacting the health of the African aviation market that require close attention?

Africa is among the most promising markets in terms of economic and business growth. In Africa, we represent nearly 70 percent of the
airplane market currently in service. Overall, our investments in Africa have helped grow the local aerospace sector, creating jobs and
driving innovation for mutual benefit from working with suppliers in five African countries, with partnerships valued at approximately USD
25 million. The vast natural resources and a young population will have a significant impact on the future of aviation industry growth and
close attention to these elements will be needed to harness their potential.

According to your recent Commercial Market Outlook, there will be demand for close to 43,000 aircraft over the coming two decades.
Which African airlines are likely to be at the forefront of this expansion? Are there any insights you can share on future trends in African
airlines’ fleet composition?

Urbanization and a growing middle-class population in Africa suggest strong traffic and aircraft demand growth over the next two decades.
Our forecast indicates that African carriers will need 1,025 new jet aircraft deliveries over this period, with 90 percent aimed at expanding
the current fleet. Single-aisle jets are expected to make up over 70 percent of commercial deliveries, with 730 new planes primarily
supporting domestic and intra-Africa demand. For long-haul routes and air freight growth, African airlines will require 275 new widebodies.
We are currently working with five airlines in Africa, which are likely to expand to meet this demand.

Your Commercial Market Outlook extends to 2041. To understand the company’s vision for Africa in this timeframe, could you elaborate on
some key elements of Boeing’s long-term strategic plans for the continent?

Our Commercial Market Outlook takes a long-term, non-cyclical perspective on the aviation market, aligning with the extended timelines of
aircraft development, production, and airline support. We remain committed to collaborating with our customers, suppliers, regulators,
and industry partners to facilitate long-term, sustainable growth.

Across the continent, we are already offering a range of services including spare parts programs to support and maintain fleets, training
solutions for airline personnel, and modification services to enhance passenger experience. Our digital solutions, such as the Boeing
Maintenance Performance Toolbox, Airplane Health Management, crew management solutions, and a variety of flight deck and operations
solutions, provide African airlines with real-time access to maintenance, flight, and aircraft performance information, optimizing efficiency
and reducing operating costs. These elements remain integral to shaping our long-term strategy for Africa.

With industry forecasts pointing towards a surge in new aircraft acquisitions by African airlines in 2024, can you tell us how confirmed
orders and ongoing deals are shaping up to meet this prediction? What share of the total aircraft orders placed by African airlines has gone
to Boeing?

In Africa, we account for nearly 70 percent of the airplane market currently in service. The commercial aviation industry remains efficient,
resilient, and essential to the modern world and we continue to collaborate with various African airlines to meet the growing demand.

Recent orders and collaborations include the 2023 delivery of the first 767 Freighter to Africa, providing Air Tanzania with dedicated air
freight capacity to support the country’s growing export and import needs. In the same year, we signed a Memorandum of Understanding
with Air Algérie for two 737-800 Boeing Converted Freighters to address increasing cargo demand in the region, along with a new order for
eight 737-9 airplanes.

This year in March, together with Ethiopian Airlines, we announced an agreement to purchase eight 777-9 passenger airplanes, with the
potential for up to 12 additional jets. This order positions Ethiopian Airlines as the first 777X customer in Africa and builds on its landmark
2023 order for eleven 787 Dreamliner and twenty 737 MAX airplanes to modernize and expand its fleet.

Additionally, governments in Morocco, Egypt, and South Africa continue to rely on Boeing Business Jets and specially configured 747s and
737s.

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Building on their long-standing partnership, Boeing and Ethiopian Airlines established a strategic cooperation in 2021 to focus on areas of
advanced aviation training, educational partnerships, leadership development, and industrial development. Could you detail the specific
initiatives undertaken within this agreement and the progress achieved towards their shared goals so far?

The Memorandum of Understanding with Ethiopia aims to position the country as Africa’s aviation hub. We will collaborate in four strategic
areas: industrial development, advanced aviation training, educational partnerships, and leadership development.

In 2008, Boeing expanded its wire harness procurement in Africa by collaborating with Ethiopian Airlines to establish a manufacturing
facility in Addis Ababa. Ethiopian Airlines also produces thermo-acoustic insulation blankets for the 737 MAX through a joint venture with a
Boeing supplier from Italy, Geven-SkyTecno.

So far, we have established strong partnerships with the Addis Ababa Institute of Technology to build a talent pipeline for Africa’s
aerospace industry, enhance engineering curricula, and foster research and development in unmanned aerial vehicles and other fields.
Ethiopia also benefits from our ‘Pathways to Space’ training course, an educational program, co-organized by Boeing and the Future African
Space Explorer’s STEM Academy (FASESA), aiming to spark interest in space careers among African youth, with at least 50 percent of
participants being girls. Additionally, we partner with Link Community Development to educate young girls. So far, over 62,000 girls have
been upskilled.

How is Boeing working concretely to bring Sustainable Aviation Fuel (SAF) to the African aviation industry? Can you outline specific
initiatives in this regard?

For nearly 20 years, Boeing has been pioneering global efforts to make SAF a reality. We are actively collaborating with local and
international partners to research, develop, and commercialize sustainable aviation fuels (SAF) from local sources.

Most recently, in 2023, Boeing and Roundtable on Sustainable Biomaterials (RSB) released a study highlighting the potential for producing
SAF in Sub-Saharan Africa, and exploring the opportunity for SAF to drive a just energy transition in Africa while generating jobs. In Ethiopia,
brassica carinata (Ethiopian mustard) was identified as a promising potential feedstock to produce biofuels while also addressing both food
and energy demand. In South Africa, the study found that there is a huge potential to use invasive alien plants for SAF production.

Boeing has remained the dominant player in the African aviation market, with Ethiopian Airlines being a prime example. However, some
are curious about overreliance on a single manufacturer. How do you address such concerns about diversification and build trust with your
African clients?

For over 75 years, our investments in Africa have helped grow the local aerospace sector, creating jobs and driving innovation for mutual
benefit. We project that intra-African passenger traffic will more than quadruple in the next twenty years, placing the continent’s growth
among the highest globally. To support this, 1,025 new airplanes will be needed over the next two decades.

Our customers are investing heavily in more fuel-efficient, more capable Boeing airplanes, and we are focused on execution and delivering
to the highest standard for our customers. At the same time, we continue to support advocacy efforts for market liberalization through our
participation in the African Aviation Industry Group which aligns itself closely to African Airlines Association (AFRAA).

Following the two tragic crashes and the recent incident, how have safety concerns surrounding the Boeing 737 Max impacted its
acceptance worldwide?

Could you provide a snapshot of the current situation regarding the particular model in Africa, including its active operation by airlines and
any new orders?

Demand across our markets remains strong and our products are competing well. In the coming days, approximately 90 percent of African
jet deliveries are expected to support fleet growth with more fuel-efficient models such as the 737 MAX, 777X, and 787 Dreamliner, with
nearly one in five deliveries replacing older airplanes. We are inspecting every aspect of Spirit’s build process and evaluating their build
plans against engineering specifications.

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We have added inspections throughout the build process at Boeing, enhancing the scrutiny on top of the thousands of inspections already
performed on each 737 airplane. Additionally, we have increased the number of Commercial Airplanes quality inspectors by 20 percent
since 2019 and are investing more in the Quality function.

Ethiopian Airlines has strengthened its partnership with Boeing through a landmark order for up to 67 Boeing jets. Announced in
November 2023, this agreement includes eleven 787-9 Dreamliners and twenty 737 MAX aircraft, with the potential to add 36 more jets.
Five of the 737 MAX planes have already been delivered. This order represents the largest Boeing jet purchase by an African carrier.

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Families of the Boeing 737 Max crash victims have opted to continue legal proceedings against Boeing despite the settlement. Could you
provide an update on the current status of these ongoing cases? What message do you convey to families of victims in Africa and
elsewhere?

We will never forget the lives lost on Ethiopian Airlines Flight 302 and their loved ones. Their memory and the hard lessons we learned from
these accidents drive us every day to uphold our responsibility to all who depend on the safety and quality of our products.

With safety and quality at the forefront, we are prioritizing stability and predictability every step of the way to ensure we can reliably deliver
and meet customer commitments. In ongoing proceedings, we will continue to cooperate with authorities and families to address any
issues raised and any upcoming challenges.

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Bewket Abebe

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