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Running a successful national carrier: The Ethiopian Airline Example

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Shola Adekola – Lagos

ET 2Individuals and groups which have argued that the success of any airline in Africa rests on its mode of ownership must have been proved wrong by the success story of Ethiopian Airline, a national carrier from the same Africa. It is no longer news of that the airline has proved cynics wrong that what they have described as a hopeless situation in air transportation in Africa is actually not totally hopeless.

This was the position of the Vice President of the airline, Mr Esayas Woldemariam, during a chat with some journalists at the Lagos Airport at the weekend. According to Woldemariam, while the success of any carrier was not necessarily dictated by mode of ownership, rather, the success of such a carrier should depend on the ability of its management or owner to develop a multi-hub system that would create a pool of network to feed passengers from different parts of the continents into its major hub before distributing them to the global network.

Besides this, Woldemariam emphasised that success of any airline could be achieved by putting in place a good route analysis structure that would address the lack of air connectivity on the continent through the development of multiple hubs to feed passengers traffic into a major network across the continent.

Woldemariam, who took time to speak on what makes the airline thick in the midst of unimpressive performance of other African carriers, said until African governments implemented the liberalisation of its air transport policy, also called the Yamoussoukro Decision, which grants free access to carriers from the continent to fly into any airspace on the continent for connectivity, foreign carriers would continue to dominate the market with their over 800 per cent market share of passengers.

The success of the African carrier can be seen in its route network that cuts across the globe with the use of sophisticated aircraft with their average age put at seven years.

The airline according to statistics has been able to lay other foundations through where the government of the country has continued to sustain itself.

The success story of the airline must have rubbished the position of many Nigerians who had argued that the government was never a good manager of businesses. According to some players in the sector, if Ethiopian Airlines, fully owned by the government, could do so well, nothing could stop other countries on the continent, including Nigeria, from doing same. The overwhelming performance of the airline, due to the managerial capability of those put in charge, has been made possible by the free hand given to the professionals to run it without undue interference.

The airline, apart from the goodwill it enjoys from its government, has also been able to embrace global trends, such as cooperation, as witnessed in its alliances with airlines across the world, which has further given it the mileage to spread its tentacles outside Africa. While the alliances have helped many airlines to survive the harsh economic situations, reverse has been the case with the Nigerian airlines, which, despite all pleas, have chosen to remain separately without any progress.

Ethiopian Airlines Vice President attributed the woeful performance of African airlines to the inability of the respective countries to put in place a dedicated and honest management team, which should see air transport as a tool to integrate the economic development of the continent rather than the ongoing argument that the failure of the African carriers was because they were owned by government fully.

He said because Africa was not easily connected by rail and road modes of transportation, air transportation, therefore, becomes the cheapest mode to connect all parts of the continent for accelerated economic integration development.

To Woldemariam, many African carriers failed because they did not invest enough in route development and adequate equipment to leverage their operations as major players in the global air transport industry.

He said investment in smaller carriers by major national airlines, as Ethiopian Airlines had done with ASKY Airlines in Lome, Togo, and Air Malawi in Lilongwe, had assisted in the development of two regional hubs in West, Central and Southern Africa, which, he said, had allowed the airlines to feed passengers into the major hub in Addis Ababa. With the multiple-hub system, Ethiopian Airlines, he said, was able to connect passengers from different parts of Africa into its global route network as a Star Alliance member.

“The solution to how to deliver successful airlines in Africa is not a matter of the mode of ownership. African carriers have failed not because they were owned by the government or privately run. It was because the airlines lacked diligent managers who had the autonomy to run the carriers with industry discipline.

“African carriers can do well if the right template is in place and one of the ways of achieving this is through the multiple-hub system.

This system allows the carriers to put in place a passenger feeder network from its smaller hubs into a major hub for global passenger distribution.

Africa needs successful carriers which it could use to facilitate its economic integration. This has become key, because the continent is not connected by rail or road. Air links could strengthen businesses in Africa with low level investment in infrastructure,” he said.

Currently, Ethiopian Airlines is the largest and most successful African carrier by revenue and profit, according to the International Air Transport Association (IATA), the global clearing house for standard airlines across the world.

The Star Alliance member airline currently operates direct flights into four cities in Nigeria: Lagos, Abuja, Enugu and Port Harcourt, making 20 weekly flights into the country. Ethiopian is currently implementing a 15-year strategic plan called Vision 2025 that will see it become the leading aviation group in Africa with seven business centres: Ethiopian Domestic and Regional Airline; Ethiopian International Passenger Airline; Ethiopian Cargo; Ethiopian MRO; Ethiopian Aviation Academy; Ethiopian In-flight Catering Services and Ethiopian Ground Service.

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