Ethiopian Airlines Reports $28 Million Loss from Domestic Flights, Confirms Ongoing Fund Freeze in Eritrea











Addis Ababa, August 5, 2025 — Ethiopian Airlines Group has reported a $28 million loss from its domestic flight operations over the past fiscal year, according to CEO Mesfin Tasew. The loss, he said, stems from rising costs in foreign currency while domestic ticket prices remained largely unchanged amid macroeconomic reforms.

Speaking at a press briefing on the airline’s annual performance, Mesfin addressed key issues raised by stakeholders, including soaring ticket prices and the airline’s frozen funds in Eritrea.

Domestic Flights Operated at a Loss

Mesfin noted that although international ticket sales are priced in U.S. dollars and automatically converted into local currency at the daily exchange rate, domestic flights are priced in Ethiopian Birr. He stressed that, despite the local currency’s devaluation over the past year, the airline refrained from significantly adjusting domestic fares.

“The exchange rate has more than doubled, but we only made minor adjustments to domestic ticket prices,” he said. “As a result, we lost $28 million operating domestic flights.”

The losses are primarily due to the dollar-based cost structure of the airline’s operations. Aircraft purchases, lease agreements, spare parts, and fuel are all priced in U.S. dollars. Mesfin warned that while the airline has absorbed these costs temporarily to maintain affordability for domestic travelers, it is unsustainable.

“We cannot continue to operate at a loss. We’ve held prices down for a year to support stability, but we will begin adjusting fares to reflect rising costs,” he said.

Fare Adjustments During Holidays

To recoup costs, the airline plans to implement seasonal pricing adjustments—particularly during holidays. Outbound fares will rise while inbound return flights remain lower to prevent planes from flying empty.

Mesfin cited examples such as the Qulubi Gabriel pilgrimage, where thousands fly to destinations like Al-Alu just before the holiday, but few return immediately after, leading to imbalanced flight occupancy.

“We may operate up to 20 flights per day during such holidays. On the outbound leg, flights are full, but on return, they’re nearly empty. To cover that cost, the outbound fare must increase,” he explained. “We ask the public to understand this necessity.”

Eritrean Funds Still Frozen

The CEO also addressed the airline’s ongoing inability to repatriate funds held in Eritrea. As previously reported in July 2024, Eritrean banks blocked the airline from transferring its revenues back to Ethiopia.

“Our funds remain frozen in Eritrea. We attempted to recover them through the legal system, but due to political and procedural barriers, we were unsuccessful. Releasing the funds will require a political solution,” Mesfin stated.

Although the airline suspended commercial flights to Eritrea, it continues to operate through Eritrean airspace without issue.

“We are not flying to Eritrea, but we use its airspace regularly. We’ve had no problems with Eritrea’s civil aviation authority. We also use Sudanese airspace when necessary,” he added.