ETHIOPIAN AIRWAYS TO FLY TO MONROVIA

1. (SBU) SUMMARY: Ethiopian Airways (EA) will begin flights to
Roberts International Airport (RIA) October 25, expanding its
service in West Africa by linking Monrovia to Addis Ababa through
Accra. EA's entrance will meet the need for more avenues from
Liberia into Africa, Europe and the United States, and testifies to
international carriers' increased interest in the lucrative West
African routes. Lockheed Martin, acting as principal negotiator for
the airport, believes it secured a favorable deal for RIA that will
unlock new revenue streams.
As security and safety challenges continue to delay direct flights
to the U.S, other international airlines are establishing a presence
in Liberia, and should increase competition for European and U.S.
routes. END SUMMARY.



2. (SBU) RIA signed a contract October 13 with Ethiopian Airways to
offer daily flights six days a week to Addis Ababa. EA will service
Monrovia Sunday through Friday in either the mid-morning or early
afternoon, stopping in either Accra or Conakry before arriving in
Addis Ababa. Lockheed Martin Country Manager Jim Ebanks told
Econoffs October 14 that Lockheed principally negotiated the
contract.



3. (SBU) The advent of EA flights will provide an additional route
from Liberia to other African destinations, Europe and the United
States. In addition to the Brussels Airlines flight via Abidjan and
Brussels, Kenya Air via Accra, or Royal Air Maroc via Casablanca,
travelers departing Monrovia may now reach the continental U.S. via
Addis Ababa and Rome. Fares are likely to be comparable, while
total flight time to the United States may actually decrease on
flights through Accra. Ebanks believes EA is interested in
capturing more passenger traffic along the West African route and
increasing transfers at its Addis Ababa hub. Ebanks stated RIA and
LCAA are currently in discussions with other carriers for flights to
Monrovia, including Royal Jordanian, South African Airways and
Emirates.



4. (SBU) The Ethiopian flight will also provide much-needed revenue
to RIA. The EA 757 servicing Monrovia will provide ample
opportunity for revenue generation, including $1,000 per landing and
additional aircraft and passenger fees. Tension in Guinea may mean
the aircraft, crew and passengers would overnight in Monrovia rather
than Conakry, generating additional sources of revenue. For years,
RIA lacked the capacity to support overnight services, disqualifying
it as a destination for many long-haul commercial carriers as well
as U.S. military flights. Under Lockheed management, Ebanks stated
that RIA is now able to accommodate aircraft overnight, thanks to
increased potable water service and fuel capacity. Ebanks does not
view the lack of catering services as an issue because the
over-nighting flight will fly to Accra first, where catering is
available. In addition to over-nighting, Ebanks said Lockheed
Martin is exploring new revenue streams, such as charging passengers
for use of the now-closed VIP lounge, parking at RIA, and cargo
storage.



5. (SBU) Given RIA's tight budget, the revenue from the regular
flights will provide fiscal space for new investments in
infrastructure and customer service. Ebanks detailed Lockheed
Martin's plan to use the projected revenue to build a mezzanine
level in the airport's existing cargo storage facility, part of a
long-term plan to market RIA as a transshipment point. Ebanks also
plans to expand the parking lot to add paid parking spaces.



6. (SBU) Lockheed Martin believes it has vindicated its presence as
de facto manager of the airport (reftel). Ebanks claims
international airlines appear more enthusiastic about venturing into
Monrovia, thanks to improving safety and security measures and
tighter fiscal controls at RIA. He added that Lockheed Martin led
negotiations with Ethiopian Airlines, and prevented RIA management
from acceding to EA's request for a 20 percent discount on its
contract. The Liberian Civil Aviation Authority (LCAA) certified
EA, but was not involved in contract negotiations.



7. (SBU) COMMENT: The addition of a second route to Europe and the
United States is welcome, and could entice more international
carriers to open up new routes into Africa and Asia. With the added
competition, Brussels Airlines may feel some pressure to compete on
fares. Ethiopian Airlines plans to arrive and depart during
daylight hours, which may prove more convenient for travelers than
with Brussels or RAM, which fly at night. However, most travelers
likely will continue to prefer the convenience of direct flights to
Europe. Ethiopian Airlines does not have a code-share agreement
with a U.S. carrier, so official USG travelers would have to travel
first to Accra in order to take a Delta or American Airlines
code-share flight. If Ethiopian Airlines opts to overnight in
Monrovia rather than Conakry, RIA will have an opportunity to prove
its ability to service and secure aircrafts for longer stays, and
Liberia may showcase the nearby RLJ Kendeja Resort to crewmembers
and passengers.

MONROVIA 00000785 002 OF 002




THOMAS-GREENFIELD