DISCOUNTED CASH FLOW VALUATION OF ETHIOPIAN AIRLINES GROUP: COUNTRY RISK, CURRENCY VOLATILITY, AND SOE DYNAMICS IN AN EMERGING MARKET CONTEXT

Authors

• Rediet Wale Yirga, University of Texas at ArlingtonFollow

Document Type

Thesis

Abstract

This study presents a discounted cash flow valuation of Ethiopian Airlines Group, a state-owned enterprise in sub-Saharan Africa's largest aviation market. No published academic study has applied rigorous quantitative valuation to the airline within an emerging market framework. This research addresses that gap by constructing a multi scenario DCF model using audited financial data from FY2019/20 through FY2023/24, with projections through FY2029/30. The model incorporates a country risk premium using Damodaran's methodology and accounts for ETB/USD depreciation following Ethiopia's 2024 exchange rate liberalization. Sensitivity analysis identifies exchange rate volatility, fuel costs, and discount rate as primary drivers of enterprise value uncertainty. The findings contribute a practical valuation framework for Ethiopia's emerging capital market and academic insight into adapting financial models for African state-owned enterprises.

Disciplines

Corporate Finance | Finance and Financial Management | International Business

Publication Date

Spring 5-2026

Faculty Mentor of Honors Project

Dr. Yibing Du

License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.

Recommended Citation

Yirga, Rediet Wale, "DISCOUNTED CASH FLOW VALUATION OF ETHIOPIAN AIRLINES GROUP: COUNTRY RISK, CURRENCY VOLATILITY, AND SOE DYNAMICS IN AN EMERGING MARKET CONTEXT" (2026). 2026 Spring Honors Capstones Projects. 11.
https://mavmatrix.uta.edu/honors_spring2026/11