Zambia’s Industrial Development Corporation (IDC) and Ethiopian Airlines have signed a shareholder agreement that will see Ethiopia Airlines acquiring a 45 per cent stake in the yet to be established Zambia Airlines.

The two parties joined forces as strategic equity partners in a bid to develop Zambia’s national airline while seeing Zambia Airways take to the sky this year.

IDC with a majority stake of 55 per cent will operate the airline while offering financing necessary to support its growth.

A total of US$30 million will be injected as initial investment in the project.

“As shareholders, we have a clear sense of the direction we need to take in order to ensure the fortunes and secure growth of the national airline. We will instill a performance driven culture through strong corporate governance structures and make Zambia Airways commercially viable.” reads the signed agreement.

Zambia Airways with the help of Ethiopian plan to launch local and regional routes as well as operate 12 aircrafts and carry over 1.9 million passengers by 2028.

Ethiopian Airlines Africa Expansion As part of its strategy to more than double its fleet and become one of the world’s biggest airlines in the next few years, Ethiopian has been closing on deals that involve acquiring smaller African airlines and diversification of the business by venturing into the logistics and hospitality space.

In addition to the above stake in Zambia Airways, Ethiopian now owns 100% of new Ethiopia-Mozambique Airlines, 49% of Guinea Airways, 49% Chad Airlines, 49% of Air Malawi and it is in talks with Air Djibouti to set up a carrier through a joint venture. Reuters recently reported that the airline was the front runner to manage proposed Nigerian national airline.

In its 2016/17 fiscal year ended July 2018, Ethiopian Airlines reported a profit of of $229 million while passenger numbers grew to 10.6 million .