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Boeing Co (BA.N) announced one of its largest plane orders of the year on Tuesday as African carrier Ethiopian Airlines [ETHA.UL] agreed to buy five twin-aisle 777s worth $1.3 billion at list prices.

The deal marks a high spot in a difficult year for Boeing and rival Airbus, a unit of EADS (EAD.PA), as struggling airlines hold onto cash and defer or cancel many of the planes they already have on order.

As of July 21, Boeing had 106 plane orders on its books for 2009, but also 89 cancellations, leaving a total of only 17 net orders for the year.

In 2006 -- the peak of a three-year plane-buying boom -- Boeing notched 1,413 net plane orders.

Ethiopian Airlines, which operates a Boeing-only fleet, will be the first African carrier to operate the 777-200 LR (long range) planes.

The aircraft will be fitted with engines made by General Electric Co (GE.N). (Reporting by Bill Rigby; Editing by Tim Dobbyn)

SEATTLE, Reuters

Ethiopian Airlines announced plans Tuesday to buy five 777-200LR aircraft from Boeing Co. (BA) as part of a $4.2 billion order split with Airbus, but left its order for the delayed 787 unchanged.

The first 777 is set to arrive in October next year, three months after what had been the expected delivery of the smaller 787 before the latest delay to the project.

Boeing has said it will announce a new first-flight schedule for the 787 by the end of September.

The flag carrier also signed a memorandum of understanding to acquire 12 A350-900s from Airbus, starting in 2017. The A350, like the 787, is an all-new aircraft that has been subject to delays and design changes, with Airbus targeting 2013 for first deliveries.

The order is one of the largest-ever by an African airline, and comes amid a broad slump in business for Airbus and Boeing.

Ethiopian operates an all-Boeing jet fleet of 29 aircraft and was the regional launch customer for the 787. It has been forced to lease alternatives and delay expansion as the 787 schedule has slipped.

The U.S. aerospace group said Ethiopian's definitive contract for the ultra-long range 777s - valued at $1.3 billion, based on list prices - will not affect the 787 plan, even though the aircraft had originally been slated to arrive this September.

Some Boeing customers have used its delayed entry into service to change or defer deals, while others are seeking penalties for its late arrival.

Ethiopian, widely regarded as one of the best-run airlines in Africa, plans to use the 777s on routes to Asia and North America from its high-altitude base in Addis Ababa, citing Beijing and Washington D.C. as potential markets for the planes.

The airline has developed a strong regional network to position Addis Ababa as a base to feed long-haul traffic into Africa, competing with fast-growing Middle East carriers such as Emirates Airline.

Net profit rose 9% to 515 million birr (US$41.1 million) in the six months to Dec. 31, the latest data available, with operating revenue up 55% at 6.7 billion birr. It carried 1.5 million passengers during the period, with freight more than doubling to 55,000 tons. In the year to June 30, 2008 it made a net profit of 507 million birr.

By Doug Cameron

Ethiopian Airlines signed a Memorandum of Understanding (MoU) for 12 Airbus A350 XWB aircraft, Airbus, a unit of European Aeronautic Defence and Space NV Co (EAD.FR), said Wednesday.

 Firm orders for the A350 XWB now stand at 493 from 31 customers worldwide, Airbus also said.

MAIN FACTS:

 - The airline has selected the A350-900, and will operate the aircraft from their hub in Addis Ababa, linking Africa with Europe, the US and Asia.

 - The A350 XWB Family is Airbus' response to widespread market demand for a series of highly efficient medium-capacity long-range wide-body aircraft. With a range of up to 8,300 nm / 15,400 km, it is available in three basic passenger versions.

 - The A350 XWB has the widest fuselage in its category, offering unprecedented levels of comfort, the lowest operating costs and lowest seat mile cost of any aircraft in this market segment. Powered by two new generation Rolls Royce Trent XWB engines, the A350 XWB family is designed to confront the challenges of high fuel prices, rising passenger expectations, and environmental constraints

By Paris Bureau

The ongoing power crisis coupled with generator problems caused Ambo Mineral Water Factory to totally halt production for seven days two weeks ago.
Almost immediately, the cessation caused the price of mineral water to triple in Ethiopia’s major cities, Capital learnt.
A source in the sales department of the factory
told Capital that ever since the Ethiopian Electric Power Corporation (EEPCo) introduced power rationing, the factory was producing at one third of its full capacity of 240,000 bottles per day using diesel generator. The generator is only able to supply enough electricity to power a single line of the factory’s production machinery, and has also suffered a breakdown itself: “A technical problem a week ago with the generator that kept alive production for the last few months has contributed to hiking the price,” a source said.
Previously, the price of a single crate - 24 bottles - was 38 birr, which dealers distributed for approximately 45 birr to users. But since the production decrease two months ago, dealers have been distributing crates for around 70 birr. For the consumer this has meant a hike from the regular price of five birr to 16 birr for a bottle.
According to another anonymous source, EEPCo has given permission for the company to use power every other day from last Monday.
A further additional factor causing the delays is unrelated to power problems, as three weeks ago Italian Agapti Company started maintenance work on the second production line of the factory. This work should be completed in the next week.
According to the sales source, the company has distributed a root card - which contains information about their quotas - for dealers in an attempt to manage the distribution fairly.
“But the demand has a big gap than the current supply, which make it difficult to control the dealers who sold the products over the price,” he explained. However, the factory is distributing its product for big hotels as usual, a source said.
Ambo Mineral Water Factory, located 130 kilometres west of Addis Ababa in Ambo, was established 77 years ago and controls over 85 per cent of the mineral water market in Ethiopia. A year ago the state Privatization and Public Enterprises Supervisory Agency (PPESA) and a company based in South Africa, SABMiller Beverage, negotiated to acquire the company jointly. As agreed between the two parties, factory expansion work by Crones, a German firm commenced a week ago. When the expansion is completed the production capacity of the factory will double to just less than half a million bottles per day.
Ambo is exporting its product in US, Saudi Arabia, Australia and Djibouti.
The other previously state owned mineral water plant, Babile Mineral Water Factory, is located 526km east of Addis in the Harari Regional State and was sold to local company Petram Plc in March 2007. Petram bought the factory for 6.5 million birr.
SAB Miller is one of the world’s largest brewers and includes among its products international beers such as Pilsner Urquell, Peroni Nastro Azzurro and Miller Genuine Draft, as well as range of South African brands such as Aguila, Miller Lite, Snow and Tyskie. It is also one of the largest bottlers of Coca-Cola products in the world.
The state-owned electric power producer requested industries to halt their production until the hydro power electricity generation improved with the coming of the rainy season. Most industries are using diesel generated power to continue their business while they wait for the green light from EEPCo to resume business as usual.
The situation is contributing to inflating the price of goods and services in the country, particularly in Addis Ababa.

Ethiopia's flag carrier, Ethiopian Shipping Lines (ESL), is to buy nine vessels from China, it was learnt.

Reliable sources told The Reporter that a Chinese ship-building company has invited ESL to buy the nine vessels on an installment payment to be settled within ten to fifteen years. According to the sources, the company made the generous offer because of the economic downturn which had significantly reduced order for new ships. The construction of these ships were reportedly ordered by other shipping companies which declined to take them because of the global market turmoil.

Ambachew Abraha, chief executive officer of ESL, told the reporter that the negotiation was at early stage. “It is too early to comment. We will make it public when we finalize the negotiation,” Ambachew said. However, our sources said the company’s board of directors had given the green light for the purchase of the nine vessels. The price of the vessels is not known.

The public relations office with ESL confirmed that there was an ongoing negotiation with the Chinese counterpart. However, it said no agreement had been concluded. “We would notify you when a deal is made,” the office said. ESL has nine vessels with has a total tonnage of 150,000. Last year the company made a net profit of 400 million birr. ESL has a monopolistic right on the country’s import export-business.

ESL was founded in1964 and started operation in 1966 with three newly-built ships (two general cargos and one tanker).

It was established as a share company with a capital of 50,000 birr, subsequently to be raised to 3,750,000 birr. Taurus Investment Inc. of Washington DC Agreed to subscribe to 51 percent of the capital requirements by designating two directors of the company. The Ethiopian government underwrote the remaining 49 percent of the capital required, designating two directors of the company. Eventually, the American sold his share to the government and the company has been fully owned by Ethiopia since 1969/70.

The company is now a share company with a capital of 289 million birr and operates under the supervision of Public Enterprises Supervising Authority

By Kaleyesus Bekele
Reporter

The National Bank of Ethiopia (NBE) has issued an amended directive that aims to relieve travellers of the inconveniences associated with travellers’ cheque by increasing the amount of cash they can carry upon entrance and departure.
Signed by NBE’s Governor Teklewold Atnafu, a copy of the directive was sent to the Prime Minister’s Office, the Ministry of Finance and Economic Development and the Ministry of National Intelligence Service, among others.
According to the document Capital obtained, the Ministry of Foreign Affairs is disseminating the amended version of the directive to all diplomatic missions and international organisations in Ethiopia. The Revenue and Customs Authority was instructed to enforce the directive from June 4, 2009.

The new directive amended the eight directions made on March 18, 2008 regarding the inward and outward flow of currency by travellers entering or exiting the country. The new guidance increases the amount of money travellers are allowed to carry upon entry and exit from 1,000 dollars to 3,000. The document, dated June 15, 2009, reads: “It is found necessary to amend the directions as some problems occurred during their execution.”
According to a source at NBE, the directive is believed to mitigate problems that are associated with issuing of travellers cheque that do not allow holders flexible use.
“As cash is liquid, it can be used everywhere. So, it aims at providing more flexibility for travellers,” the source told Capital, adding that the 2,000 dollar increase is a major change.
Accordingly, any traveller who is a non-resident of Ethiopia is obliged to declare any amount of cash exceeding 3,000 dollars or its equivalent in any other convertible foreign currency at the point of entry into the country by filling out a declaration form of the Ethiopian Customs Authority.

In a similar manner, the non-resident traveller is not allowed by the new directive to carry more than 3,000 dollars upon departure from Ethiopia unless he produces evidence obtained within the country that he is entitled to it.
The directive seems relaxed towards residents of Ethiopia. It states that Ethiopian or foreign national residents may carry cash upon departure, but only by producing evidence that foreign currency was purchased from a bank, or by producing a customs declaration not more than 45 days after it was issued. The amount allowed is not stated, however. The same goes for Ethiopian nationals who reside abroad, or are foreign nationals of Ethiopian origin.

Foreign nationals who stayed in Ethiopia on business or for a holiday are allowed more than 3,000 dollars, but only upon certifying purchase of the currency. The same rule goes for transit travellers who stay in Ethiopia for more than 24 hours.
“Employees of embassies and foreign organisations or individuals entering into the country through embassies or foreign organisations on temporary employment or to attend workshops or seminars or to give training may leave the country carrying more than 3,000 dollars in cash only where they produce a bank advice showing that they were paid directly from a bank,” it said adding that a confirmation letter that they were paid by a withdrawal from the embassies or the foreign organisations foreign currency account or safe custody could also be admissible.

Last but not least, the directive states that travellers entering or exiting the country cannot carry more than 200 Ethiopian birr. Before the new directive was issued, it was just 100 birr. “Coupled with the current inflation, it is fair. It will help exit travellers upon their come back for small miscellaneous expenses,” added the NBE source.

By Elias Meseret
Capital Ethiopia