Ethiopia Offers Somaliland Stake in Ethiopian Airlines in Unprecedented Deal

In a groundbreaking agreement between Ethiopia and Somaliland, the Ethiopian government is set to grant an undisclosed stake in its state-owned flag carrier, Ethiopian Airlines (ET), to Somaliland. This historic pact, signed on January 1, 2024, also involves Ethiopia securing a 50-year lease of a 20-kilometer stretch of the Gulf of Aden coast, marking a significant move toward enhanced diplomatic relations and strategic benefits for both parties.

Negotiations regarding the specific details of the stake allocation are expected to be finalized within a month, according to Redwan Hussein, the national security adviser to Ethiopian Prime Minister Abiy Ahmed.

The Memorandum of Understanding (MoU) signed by Prime Minister Abiy and Somaliland President Muse Bihe Abdi outlines not only the stake in Ethiopian Airlines but also Ethiopia’s access to the Gulf of Aden coast for both military and commercial purposes. While the exact location of the coastal stretch remains undisclosed, Somaliland claims the agreement includes formal recognition of its sovereignty. However, the Ethiopian communique focuses on “bolstering political and diplomatic relations” without explicitly referencing diplomatic recognition of Somaliland as an independent state.

Somaliland, a former British colony that briefly united with Somalia in 1960 before pursuing renewed independence, has operated as a de facto state since the early 1990s. Despite being recognized as part of Somalia by all UN member states, Somaliland functions independently, and this agreement could signal a shift in its diplomatic status.

Mogadishu, the capital of Somalia, strongly opposes the agreement, labeling it “blatant aggression” and vowing to oppose it.

Ethiopia, which lost direct sea access in 1993 after Eritrea’s secession, had previously sought a similar arrangement with Eritrea for access to its Red Sea port of Massawa. However, the current deal with Somaliland marks the first time a foreign government will acquire a stake in Ethiopian Airlines. The airline is renowned for investing in other African start-ups, including ASKY Airlines, Ethiopian Mozambique Airlines, Malawi Airlines, Nigeria Air, Zambia Airways, and Air Congo.

This unprecedented agreement has far-reaching implications for diplomatic relations in the region and marks a significant development in the airline industry. Stay tuned for further updates as details of the stake arrangement and its impact unfold.