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Ethiopian Airlines: A role model for Government owned airlines

Published in Travel & Tourism Wednesday, 30 May 2018 15:54

  By R. Chandrasekar

African Business magazine in its August 2017 issue said, ”Ethiopian Airlines, the largest airline has ordered 10 additional Airbus 350-900s and set in motion a $345 Million airport expansion project to raise the annual passenger capacity at Addis Ababa’s Bole International Airport from 7m to 22 m.” One would expect the performance of any state owned airline in any part of the world to be worse than the comparable private airlines where the profit is the king.

Even the famed Air India, another state owned airline in Asia has been bleeding.  Every day in the parliament, discussions are on about the need to turn it into  profitable and sustainable airline. The latest move is to invite a foreign airline to invest upto 49%. State owned African airline Companies like Kenya Airlines and  South African Airways have been struggling in the same continent with unfavorable and poor management practices than Ethiopian. Private African airlines like FlySafair, Fly 540,JamboJet,Dana Air,, Fastjet, Mango, Kulila,, FlySafair, Dana Air are all in different situations.

There are many firsts to the credit of Ethiopian. Was incorporated on December 21, 1945.Apart from having a very modern fleet of aircrafts, it is the first to order 789 Dreamliners in 2012.In 2016, Ethiopian registered an increase of 18% passenger bookings than the last year when most of the others have been growing at 5 percent and  Of course the profits also soared to a record profit of $ 273 Million in the 2015-2016. In fact, Ethiopian recorded a full-year profit of more than all other African carriers combined recently,  African aviation passenger markets has been melting with huge losses, which gave space for the foreign airlines like Emirates, Turkish  and Qatar to find inroads. Governments have been indifferent to the approaches by their state airlines in Africa. Restricting them to just domestic routes is one sure way to financial disaster. What works for Ethiopian is a mystery. But largely it is believed that Ethiopian follows the Singapore airline model which is also state controlled.

Still Ethiopian stands out by using the right management practice that may be old fashioned but now working to it’s advantage. The stability of the tenure of the CEO is one simple fact. The performance of the strategic directions that the board has set has been surpassed in the half period of the plan itself. That proves the simple fact that a plan, even in a state owned public sector undertakings works and that too in Africa, if a good management  is in place. Add to this, the favourable conditions like the drop in the fuel prices over a period of ten years, the disappearance of credible competition in Africa, the closure of many airline companies and the general difficulty of funding any expansion of the airlines because of lower credit rating, all add up.

While one talks about the net result, the road to achieve that is not a paved  of roses. Passengers travel from 100 international destinations and having a hub at the congested Addis Airport adds to the discomfort. Even there are no flash sales like what the US or trans Atlantic flights offer. But as someone else said, the peculiar combination of vision, determination and the right talent has made Ethiopian what it is today.

By all this, Ethiopian proved to be a Multi Award Winner receiving recognition from reputable organizations for the following:
Outstanding Food Service , African Cargo Airline of the Year Award, Africa Best Employer Brand and Business Leadership Excellence Awards,  Star Alliance CEO Awards for 2016, Airline of the Year Award, Rising Star Carrier of the Year Award, Reward Employer of Choice & Local Attractiveness Employer of Choice Awards, Best Airline Staff in Africa Award and African Airline of the Year.

The inner details of Ethiopian

Ethiopian had pledged itself since inception to focus the customer satisfaction as the key to the success. Safety is a key ingredient. The training given  to the staff and the Cabin Crew is world class. The USD 100 Million Aviation Academy started in 2016 is more like a world class University and autonomous. This was recognized as ICAO Regional Training Center of Excellence on May 11, 2016 at the ICAO’s Global Aviation Training and TRAINAIR PLUS symposium held at Conrad hotel in Seoul, Korea.

Every aspect that will help Ethiopian  is under one roof including the Maintenance, the flight catering and  ground services. Even, all airlines who need MRO services in Addis are catered to by Ethiopian. Cargo is also making it’s contributions to the top line and bottom line.Multibrands of the aircrafts have been a pain for many airlines but not Ethiopian. It patronizes both Airbus and Boeing. Regional hubs like Lome and Lilongwe have helped both Ethiopian and also the customers. Without any political overtones, Ethiopian flies to where there is business. For instance, it flys to Dubai, Bangkok, Mumbai and Singapore. That is the marked difference. When one says State owned Airline then politics comes in with that, but not in Ethiopian.
That is why it even got the permission from the federal Aviation Administration to land in the US.

The range of awards tells us clearly the high customer satisfaction for Ethiopian service. Every customer can fill up a satisfaction survey that has all the parameters  that are important way to improve the services. From the observation to actual action there is virtually no time wasted. Any serious matter of complaint gets  the attention of the top honcho. Comments on such items like check in time duration, overall service at the airport, services even by the immigration, customs and security at Addis, boarding and transfer processes, airport facilities at Addis, friendliness and availability of the cabin crew to attend to , cabin cleanness, overall aircraft cabin features, onboard meals and beverages, onboard entertainment, quality of service, are all of great concern to Ethiopian. But like most of the old and well established airlines in Europe and the US in historical times, still the African hospitality runs supreme over all considerations.

What one quality that stands out in Ethiopian, is the enthusiasm and a fresh approach to the inflight services by the Cabin Crew. When the writer went in a recent flight in Ethiopian that had several flights to reach thedestination, he had the share of great in flight experience. Cabin crew like Sosina, Kalkidan,Meron, Bily Belay, MarymawitTesfaye and TizitaWoldemariam showcased their care and concern. This concern is the best, coming from a public sector airlines.
Even the Ethiopian coffee desk at the Cloud Nine Lunge is superb and great. The efficient service what the customer service desk offered by Salam, is very impressive from the perspective of an African airline. 

In line with the Vision 2025, Ethiopian Cargo is building a state of the art cargo terminal with an annual capacity of 1.2 million tons and planning to serve 47 destinations using 18 freighter aircrafts.

The official web site brings in  an important factor to limelight in any choice of an airline. That is the scale of the MRO operation at Ethiopian is breathtaking. “It is the largest MRO service in Africa and serves this continent and the Middle East. The facility is fully equipped with Hangars, Engine and Component Maintenance workshops and all the harnesses and equipment needed to dismantle, repair and overhaul aircraft, engines and components.”
The Ethiopian MRO service was established in 1957 and it currently employs over 2,000 technical personnel out of the total workforce of nearly 14,000. Ethiopian MRO provides Line Maintenance services at all stations where Ethiopian flies and extends the services to other operators at some of the stations. The facility is fully certified by the ETCAA, FAA and EASA. Ethiopian MRO offers world-class services to its customers and helps make Ethiopian one of the most dependable and safest airlines in the world.

What the future holds for Ethiopian?
It is predicted by the aircraft manufacturing major that African aviation will raise up to have thousands of new aircrafts in the next 20 years. When all the African airlines are not a match to that of  Ethiopian, even buying new aircrafts will be easy for Ethiopian setting a clear gap between Ethiopian and others. The state ownership can help this. If and when  Ethiopian wants to go public it will be  a blue chip share  do the IPO.

Eager acquisitions by Ethiopian like the state owned ARIK AIR could bring  in some serious instability. It also has already a 49 percent Stake in Malawian Airlines and 40 percent  ASKY Airlines in Togo.Ethiopianis planning a tie up withZambia Airline, it is reported.

But it seems these can get Ethiopian  in to a storm as it has grown into what it is today not by acquiring but by creating a new African Airline DNA. History tells us that manyworld class airlines have come to naught when they did this in the past and many  iconic brands have disappeared all together. So this is a point of worry.Organic growth is much more tested than the acquisition.

When Ethiopian has been an inbred African airline, and has been in the aviation scene from 1946, the quick pace of development in the aviation market led by Ethiopian  can bring in other suitcase operators who can distort the market considerably. Even the mighty Chinese Airlines are viewing Africa as the  future growth market. This is a serious matter to take note of.

Fuel prices can also add difficulties in the future as the prices have  been rising.

The well trained staff may leave to join other well paying airlines in Africa itself. So what defense Ethiopian has if the ownership  changes in color and content, and how Ethiopian as a commercial entity is safe from such a possibility?

Will it reach its revenue target of  $10 billion by 2025, and also expand it’s fleet to 140 aircraft from less than 90 now? Only time will tell. But the ever growing outbound Indian airline passenger traffic could be a big game changer attraction for Ethiopian, as Ethiopian has already over 100 international destinations presently serviced. When the sheen erodes of the European and US airlines, certainly everyone including the Indian passengers can see Ethiopian shining.

Mr. Ato Busera Awel, the Chief Commercial Officer of Ethiopian Airlines had made the position of Ethiopian very clear by his answers to  a few questions here:

1.    How are you proposing to keep the tremendous lead for Ethiopian among all the other national carriers of Africa?

Ethiopian is an aviation pioneer Pan-African carrier introducing the leading-edge systems, products and services. In its successful 70 plus years of operation, the airline has proved to the world that an African carrier, with skillful and independent management, can emerge as one of the strongest air transportation company.
Based on its deep-rooted global standard corporate culture, and experienced organizational structure, the airline will maintain its fast and sustainable growth through expanding global route networks and establishing additional hubs in different parts of Africa among other major strides.

2.    Why are you collaborating with other African state airlines?
The main reason behind collaborating between and among other African state airlines is to grow together and gain fair share of the African market. In order to curb the domination by non-African carriers in the home market Africa, Ethiopian believes and works towards for the collaboration of African Carriers.

3.    What do you think of the near future competition like China Airlines and China Eastern Airlines which are also state owned like you?
Chinese carriers have already started operations to some major airports in Africa and more are expected to come in the near future. The strong China-Africa political and economic relation is boosting the traffic and thus it is not only the competition, but the market opportunity will also grow.

4.    What is the role, played by Ethiopian to train all the staff to offer a world class service? Are you also recruiting, selecting, training and placing international staff to give your flights an international outlook?
As a high performer organization, Ethiopian continuously strives and explores world class excellence and standards and formulates same to train its staff through different channels. Africa’s largest, Ethiopian Aviation Academy (EAA) plays greater role in this regard by formulating and continuously updating its training standards both for the existing employees, new comers and third party, private and government agencies, through delivering aviation professionals and leadership training.
Our Employment mix is global as the airline itself.  In fact, we hire from domestic Labour market for sales and marketing. But In all our international destinations, we hire local professionals in those countries based on their profession and operational customer service skills. We also train and hire cabin crew from different African countries and China as well.  Over 150 expat pilots are also currently serving the national carrier.
5.    The Middle Eastern flights of Emirates, Qatar and Etihad have set a new standard in luxury. What are your plans to reequip and retrofit the planes to keep up with the current offerings from Boeing and Airbus?

Ethiopian, as a loyal service provider to its esteemed customers, places customers’ comfort and delight on the crest of its priorities. In light of this, Ethiopian is pursuing with internet service provision on its latest and modern fleet mix of B777, B787 and A350.
Yet another development at Ethiopian is that all our B737NG fleets will have WIFI IFE streaming option soon and our 30 Boeing 737Max A/C from Boeing will have internet connectivity. Furthermore, all our new delivered B787-9 and A350 are equipped with all the hardware for KA band internet Connectivity. As a four star airline, it is our commitment to deliver a five star customer service on board.

6.    The revolution of cost cutting by Northwest and Ryanair is legendary. Are you entering into that space? Incentives are needed to pull Indian customers who are used to the great offers by Qatar, British Airways, KLM and others. Are you planning to start low cost airlines to help the demand creation in Africa?

No one knows the African air transport market as we do for we connected and developed east to west. We are also well known in cost leadership strategy.

7.    Why you have only two classes and not as many like the other Middle East competitors who are offering a suite and an apartment in the sky?

Ethiopian Premium Class (Cloud Nine) is a world class cabin that gives the best service which meets our customers’ expectations.

8.    What is your message to our readers who are from trade and industry?

Ethiopia as a country and Ethiopian as a national flag carrier are registering tremendous leaps, the former in its economy and the latter in its air transportation sector. The country’s economic boom is substantially backed by the airline’s flights that stretched across the globe. Ethiopia aims the manufacturing sector to contribute 20 percent of its GDP and 50 percent of the export volume by 2025. Hence, the country has planted several mega industrial parks in different parts of the country where Ethiopian Airlines will be a meaningful transportation channel for investors, traders and manufacturers. With its vast network in Africa, Ethiopian will also be preferable for global travelers for their movement to and from Africa. Ethiopian is always ready and pleased to serve with multiple customer-focused products and services.

9.    Ethiopian Airlines flies to many African destinations, where many regimes have very undefined and misunderstood visa regimes. Could you help them by taking over the issue of visas to those countries where you fly, if the passenger is flying for just tourism? Many national carriers tried this and it works very well.

Dubbed as Land of the Origins, Ethiopia is a country endowed with UNESCO ascribed world heritages that placed the country at the leading position in the continent. Ethiopian Airlines, as a national flag carrier, has been diligently working to widely promote the country and its tourist attractions by offering the vastest connectivity on-board the most comfortable and technologically advanced fleet accompanied by the worshipped African flavored Ethiopian hospitality. Among the major roles Ethiopian has played to make air transportation movement more facilitated is the launch of the E-Visa service for African and international participants of Meetings, Incentives, Conferences. 

We have made available an online visa application so as to make sure that anyone from any corner of the globe to Ethiopia can apply for the visa online which is very important to applicants in places where there are no Ethiopian Embassies in particular.
The launching of the E-Visa service for Meetings, Incentives, Conferences, and Exhibitions is an impetus for the exponential demand of Ethiopia’s conference tourism; saving time and cost besides inducing a modern online visa application process with more simplicity and efficiency.

10.    Which are the new stations that you are planning to fly to and why?

The fast expanding, pan- African, Ethiopian is under the colossal expansion. Currently Ethiopian flies to more than 100 international destinations yet eyeing to add 10 new destinations, Istanbul included, in just six months of the 2018. Kisangani, Mbuji Mayi, Nosy-be from Africa; Buenos Aires and Chicago from the Americas; Geneva and Lisbon from Europe; Jakarta and Shenzhen from the Asia are the next Ethiopian destinations.

11.    Why are you flying very less flights to India compared to the potential of the huge Indian diaspora in whole of Africa? This population comes to India for pleasure and business. The huge Indian out bound also needs an airline like you.

Ethiopian Presence in India is pretty large with double daily to Delhi and double daily to Bombay- with a total 28 weekly passenger flights to India.Further increasing our reaches, we are planning to start new destinations mainly in Southern India.
The fastest expanding Ethiopian Cargo & Logistics Services serves India with nine weekly freighter flights. With the ever growing India-Africa trade ties, Ethiopian will eye on expanding its presence to and from India.

12.    Your airport in Addis is being expanded by the Chinese contractors. This will enable you to start more flights no doubt. But why not have another hub in Africa like Nairobi or in J-Berg?
We have developed multiple hubs in Africa. ASKY airlines hub in Lome, Togo and Malawian Airlines in Malawi. In addition to that, We are developing other hubs in Southern Africa region like in Zambia and studying other options in Central Africa, Region in DRC Guinea in West Africa and other countries. We are striving to collaborate with African governments for opening hubs and launching their national carrier as part of our commitment for the realization of the Single African Air Transport Market (SAATM).

13.    Can you tell our readers why your Frequent Flyer program is one up on others?
Ethiopian ShebaMiles program has the following tier levels and product offerings:
1.    Platinum,
2.    Gold
3.    Silver and
4.    Blue
The benefits of our Sheba Miles include, Complimentary Upgrades, Lounge Access, Complimentary baggage allowance, Digital Card, priority in wait list in booking and Check-in, Online access to issue award tickets with their miles, additional miles offer for top tier members and much more.

Photo Caption:
Mr. Ato Busera Awel, the Chief Commercial Officer of Ethiopian Airlines

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