Belgian Politics drives Ethiopian Cargo Out of the Country

Ethiopian Cargo switches its three weekly Johannesburg flights from Liege Airport to Maastricht. Some time ago, the carrier already moved its Brussels-to-Asia operation to the Dutch Airport. According to an internal study carried out by the University of Antwerp, these moves could have been prevented.

MD-11F of Ethiopian Cargo
MD-11F of Ethiopian Cargo

From Brussels, ET flew to Shanghai and Hong Kong in an ACMI-operation on behalf of StarBroker, the in-house brokerage department of DHL Global Forwarding. Even if the operation had nothing to do with DHL Express, TNT Express filed a complaint with the Federal Transport Minister Jacqueline Galant. Supported by Liege Airport, its home base, TNT claimed that the Asian destinations were excluded from the bilateral air services agreement between Belgium and Ethiopia. Initially, Ms Galant had allowed the flights on a temporary basis.

ET now seems to pursue a total move-over to Maastricht. According to LGG, Ethiopian certainly has the intention to move the Jo’burg operation just across the border, provided the Dutch authorities will allow it to do so.

Government should stay out
The Faculty of Transportation of the University of Antwerp wrote a short non-disseminated report on the matter. It concludes that a government should not involve itself ex-ante (before the event) in the market, in this particular case: by refusing traffic rights to parties requesting these. The intervention - refusing them - could be interpreted as an attempt to benefit a certain party or put another party at a disadvantage. The government should only act ex-post (after the event) in the event of market distortion.

Swopping airports
The report says further that Hong Kong, Dubai and Shanghai are growth markets, from which all actors will be able to profit in an autonomous way. Ethiopian Airlines is an autonomous carrier, which has set up a long-standing relationship with its client DHL GF. For Ethiopian DHL GF generates a turnover of 50 million euros annually, 50% of its turnover. ET cannot afford to lose DHL GF and has, therefore, decided to swop airports.

The UA report also points out that there is no such thing as direct competition between TNT and DHL in this respect, as the cargo is related to DHL GF and not to DHL Express. Thus, this story is another example of Belgian village politics, in which the Flemish and Walloon communities not wanting to give each other the time of the day.

Marcel Schoeters in Brussels

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