VZCZCXRO7208
PP RUEHROV
DE RUEHDS #1278/01 1521002
ZNR UUUUU ZZH
P 011002Z JUN 09
FM AMEMBASSY ADDIS ABABA
TO RUEHC/SECSTATE WASHDC 4955
INFO RUEPADJ/CJTF HOA PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
RUEKDIA/DIA WASHINGTON DC PRIORITY
RUEWMFD/HQ USAFRICOM STUTTGART GE PRIORITY
RUEKJCS/JOINT STAFF WASHINGTON DC PRIORITY
RUEHLMC/MILLENNIUM CHALLENGE CORP  PRIORITY
RUCNIAD/IGAD COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS SECTION 01 OF 02 ADDIS ABABA 001278 
 
SIPDIS 
SENSITIVE 
 
DEPARTMENT FOR EEB/IFD/OMA - JWINKLER AND EEB/CBA - DWINSTEAD 
USTR FOR PATRICK COLEMAN, CECILIA KLEIN, AND BARBARA GRYNIEWWICZ 
DEPT OF COMMERCE WASHDC FOR ITA BECKY ERKUL 
 
E.O. 12958: N/A 
TAGS: EAIR BEXP ECON ETRD EAGR ET
SUBJECT: ETHIOPIAN AIRLINES CEO DISCUSSES BOEING AND AIRPORT 
STORAGE 
 
ADDIS ABAB 00001278  001.2 OF 002 
 
 
SENSITIVE BUT UNCLASSIFIED; BUSINESS PROPREITARY INFORMATION; NOT 
FOR INTERNET DISTRIBUTION 
 
SUMMARY 
------- 
 
¶1. (SBU) Ethiopian Airlines (EAL) CEO Girma Wake discussed his 
relationship with Boeing and plans for airport expansion during a 
May 22 meeting with the Ambassador.  Wake confirmed that EAL placed 
a deposit on five Boeing 777 aircraft the previous day based on his 
comfortable, ongoing relationship with Boeing.  He also noted that 
the French were "overly aggressive" in their efforts to promote an 
Airbus purchase.  Wake also detailed plans to build an additional 
7,000 square meter airport storage facility for perishable items and 
offered predictions on when a larger airport will have to be built 
outside of Addis Ababa.  END SUMMARY. 
 
BOEING STAYS IN, AIRBUS OUT 
--------------------------- 
 
¶2. (SBU) EAL CEO Girma Wake spoke candidly with the Ambassador and 
EconOff about his relationship with Boeing during a May 22 meeting. 
Wake confirmed that that EAL still enjoys a comfortable relationship 
with Boeing despite the manufacturing delays of the Dreamliner 787 
aircraft.  As evidence of this fact, he revealed in confidence that 
EAL had just paid deposits on five Boeing 777 aircraft on the 
evening of May 21.  (Note: Wake also stated that many in government 
are not pleased with the Boeing Dreamliner delay and would quickly 
shoot down any additional dealings with Boeing, so he will have to 
present this new purchase to government officials delicately. End 
Note.)  Wake jokingly stated that Boeing will "make up for" the USD 
160 million in losses EAL has sustained from the delayed Dreamliner 
delivery with attractive pricing on the 777s.  Oddly enough, it 
appears that Boeing's ability to deliver the 777s in 2010 alongside 
the 787s also helped seal the deal on this purchase.  The 
corresponding Airbus aircraft that EAL was considering (NFI) would 
be a more fuel-efficient aircraft; however, its expected delivery 
date would have been a few years away.  A final factor that 
dissuaded Wake from favoring Airbus was the overwhelming lobbying 
efforts from Airbus and the French Government.  He indicated that 
relentless pressure from the French backfired on them. 
 
AIRPORT TO EXPAND PERISHABLE STORAGE SPACE 
------------------------------------------ 
 
¶3. (SBU) Given the high demand for perishable cargo transiting Addis 
Ababa's Bole airport, new storage facility plans are in the works. 
Wake stated that a Request for Proposal closed on March 9 to build a 
7,000 square meter perishable storage facility at the airport.  He 
expects that they will start building by the end of 2009 and that it 
will take one to one-and-a-half years to complete construction of 
the three-story structure.  This facility would primarily service 
the growing needs in the floriculture and vegetable export 
businesses.  During the discussion of potential Sheik Mohammed 
Al-Amoudi or Dutch investor involvement, Wake dismissed the thought 
of introducing more than one cargo-handling agent at Bole airport. 
He cited a number of large international airports in Europe and the 
Middle East that successfully operate with one handling agent. 
 
¶4. (SBU) Currently, 55,000 tons of perishables transit Bole airport 
each year.  Wake predicts that 100,000 tons of perishable goods will 
transit the airport in the near future.  The airport currently 
operates a 17,000 square meter storage facility, which was completed 
in 2006.  Wake stated that this facility only has 2,000 square 
meters of perishable/cold storage within it, but has more than 
enough dry storage for the time being. 
 
BOLE AIRPORT TO MOVE OUTSIDE OF ADDIS? 
-------------------------------------- 
 
¶5. (SBU) Wake went on to say that Bole airport will be too small to 
accommodate the expected growth in air traffic within about seven to 
eight years.  He suggested that a larger airport would be better 
suited outside of the populous city area and could be built in 15-20 
years.  Wake stated that authorities are already looking at a 
potential plot of land south of the city via Debre Zeit road.  This 
plot is about 300 meters lower in elevation, which would facilitate 
aircraft takeoffs and landings due to the denser air at the lower 
 
ADDIS ABAB 00001278  002.2 OF 002 
 
 
elevation. 
 
COMMENT 
------- 
 
¶6. (SBU) EAL's deal on the new 777s is good news not only for 
Boeing, but for other U.S. companies as well.  Either General 
Electric or Pratt and Whitney could supply the engines for these 
aircrafts and both have representatives working within EAL to assist 
in lobbying efforts.  Wake did not indicate which supplier he 
preferred for engines, but did mention that they had corrected a 
previous problem with Pratt and Whitney engine servicing.  In 
regards to expanding storage space and expanding airport size, one 
can only hope that producers can make use of these new facilities to 
boost exports in the medium to long term.  End Comment. 
 
YAMAMOTO