The Managing Director of Ethiopian Airlines International Operations, Esayas WoldeMariam Hailu recently spoke with select journalists in Addis Ababa. He spoke about the airline’s operations in Africa, open skies for the continent, and the dominance of the region by international carriers
In what ways would you say that Ethiopia Airlines has contributed to Nigeria’s aviation industry and that of other countries in Africa in concrete terms?
As a Pan-African airline, serving our beloved continent, Africa has always been a source of pride for Ethiopian Airlines. With this commitment, Ethiopian has been able to create a missing link; availing easy movement of Africans from one corner to the other. During the temporary closure of Abuja Airport for reconstruction a few months ago, we were the first foreign carrier to land at the Kaduna Airport, allowing our passengers to experience ultimate comfort on-board our Boeing B-787 Dreamliner. In line with our long term strategic roadmap, Vision 2025, expanding and availing a more efficient intra-African network will remain at the core of our operation and we shall keep on playing the positive role in catalyzing the socio-economic development of our continent. Ethiopian Airlines maiden flight to Nigeria dates back to the 1960’s same time the country got independence from foreign colonisation.
What for you is the most challenging aspect of running Ethiopia Airlines in global aviation industry and challenging economy?
The competitive environment is not conducive for African Airlines in general and major challenges include uneven playing field, high fuel cost, high taxes and navigation fees, poor Infrastructure etc, but despite these challenges, Ethiopia has managed to remain successful, being the fastest growing airline in Africa. Beyond rhetoric, how ready are African states to embrace open sky for Africa and what efforts is Ethiopian Airlines making to actualise the implementation of that policy? As far back as 1999, 44 countries agreed in Yamoussoukro, Côte d’Ivoire (the Yamoussoukro Decision) to deregulate air services and promote the opening of regional air markets to transnational competition. Since then, however, implementation has been slow and inconsistent. Industry experts often criticise African countries for having more bilateral open sky agreements with partners outside the continent than with African partners.Ethiopian along with African Union, AFCAC (African Civil Aviation Commission), AFRAA (African Airlines Association) and all African carriers are lobbying for the implementation of the Yamoussoukro Declaration (YD) that is geared towards a comprehensive reform of the air transport industry and the unification of the fragmented African air transport market. The Yamoussoukro Declaration is an African Civil Aviation Policy geared towards a comprehensive reform of the air transport industry and the unification of the fragmented African air transport market. To make this happen, Ethiopian is trying hard to the full liberalisation that makes Africa as one sky. This will in return help Ethiopian to boost its market within African more than ever.
Knowing that it cannot go it alone how is Ethiopian working to support other African airlines to erode the market already dominated by European and Middle East carriers in the region?
In November 2016, AFRAA declared Ethiopian Airlines the best in Africa for the fifth consecutive time, recognising, in part, its “exemplary” cooperation with other African carriers. It has embarked on an ambitious development program, which includes promoting travel hubs in East and West Africa with regional partners. Other airlines such RwandAir are following suit, indicating that, with open skies and fair competition, African airlines can successfully find their way to profitability.
What has continued to inform the choice of Ethiopian Airlines aircraft types and does environmental factor and fuel utilisation in any way play a role in your choice of aircraft?
In line with this, the followings are our values for selection and operation of our fleet: young, modern, new generation, state-of-the-art aircraft that are fuel efficient, with less than five average years, right–sized fleet that best fits the airline’s projected traffic and route network; suitable aircraft for point-to-point service delivery by availing more frequencies and creating seamless and convenient connections. Products that give Ethiopia Airlines the competitive edge both in existing and new markets. We have comfortable and pleasant on-board services for our passengers by providing the best and high standard passenger amenities and in-flight services. By ensuring fleet type commonalty as much as possible – reduce maintenance cost, increase common crew type rating, and decrease spares holding; highest standard in technology and maintainability to ensure aircraft airworthiness and safe operation and environmentally friendly fleet with low emission.
How much does it cost to train a pilot and an engineer (separately) in the Ethiopia Airlines academy and in terms of finances what does the academy contribute to the general finances of the airline?
Training fee for Commercial Pilot Training Programme is $68,000.00 for the entire 20 months programme. The training fee includes:-training material, uniform and training aids, accommodation expenses; and monthly pocket allowance of ETB 2,960 (Ethiopian currency).
In all the countries you operate in and from, what position does Nigeria play as regards your market share and earning?
Even since our maiden flight to dates back to the 1960’s, Nigeria has been an ally for us. Flying to five Nigerian cities, we have been serving the Nigerian market
Ethiopian Airlines has been frugal in managing its resources and has succeeded for decades, how has the airline managed to survive despite the collapse of other national carriers in Africa?
We are very confident that we know Africa better than anyone because we have been serving the continent for the last 70 years. There is the existence of uniquely dedicated and highly committed work force led by experienced and seasoned executive management and board of directors. Highly skilled and dedicated employees – we have a dedicated and skilled workforce highly perused for employment even by our competitors and self-sufficient in training of aviation personnel, who embody the values and spirit of Ethiopian Airlines, through our aviation academy. We have dedicated team which can cope with the volatile, uncertain, complex issues. We also have efficient network of connectivity based in a strategically advantageous located hub which enables us to connect Africa with the rest of the world better than anyone else. Ethiopian has positioned vast intra-Africa network better than any airline, making its customers available with the best connection with minimum layover in Addis. We also have multi-hub strategy and one of Ethiopian strategies is to have multiple hubs in Africa connecting it with our main hub, Addis Ababa, as well as hub to hub connections. Next to the main hub, Ethiopian has established its second and third hubs in: Lomé (Togo) in partnership with ASKY Airlines and the third at Lilongwe, Malawi with Malawian Airlines. Ethiopian is a customer-focused airline, which offers to business travellers to and from Africa the most convenient connectivity options, on-board the most modern and most comfortable aircraft. Ethiopian is a Pan-African global carrier operating 95 youngest fleets in the continent with an average age of less than five years, which is under the industry average age and currently serving more than 100 international passenger and cargo destinations across five continents. Ethiopian, being a Star Alliance member, offers its customers with multiple connections and the airline also offers passenger the opportunity to accrue miles for boarding on operating airline for code share flights among Star Alliance partner airlines even when the traveller has made reservation with another airlines flight number. And the passenger is a beneficiary in using Star branded owned lounges upon Star Alliance lounge access policy.
The liberalisation of air transport is one policy your airline has pursued vigorously but leaders in the region seem to be reluctant to embrace it?
Liberalisation of air transport has been proved to be the best way to bring about high traffic volume, economic growth, free and fair market competition among carriers. Since this policy is advisable and very useful, governments are not encouraged to put restrictions on this as liberalisation helps carriers to optimise networks within the cross continental market.
What airline model of a national carrier would you suggest for Nigeria?
As for Ethiopian, its direction is clear: fast, profitable and sustainable growth is the underlying management philosophy at Ethiopian and it is in this vein that it has outlined a long-term vision that will transform the airline to a leading aviation group in Africa by 2025. Nigerians can emulate this best practice for the betterment of their airline. Though Ethiopian is fully owned by the government of Ethiopia, it is fully managed by highly experienced aviation professionals with an average service year of more than 25 and 30 years. This clear disparity between ownership and management is regarded as one of the key factors for our sustainable success.
African aviation is small and fragmented, how do we take advantage of the huge market in the continent?
African airlines have to sit and consult on the ways in which they work together to benefit from the huge market opportunities through cooperation and learning from one another (experience sharing).
African airlines enjoy just three per cent of the market share while foreign airlines get the largest chunk. How can the continent address the imbalance?
African airlines should see this as a serious threat as it is impacting on all the airlines, not only one or two airlines in the continent. Therefore, they have to integrate their transport policies and strategies so that they can jointly work together through different code sharing strategies, as well as cooperation’s and alliances. African countries improving their air transport share should be central at the continental agenda for Africans. By doing so, they can maximise their existence in the sky of Africa. Otherwise, the existence of Africans in their own sky will be a fable if things continue in this way.
What do you think African governments can do to improve aviation growth and development in the continent and long-term existence of African airlines?
First, African governments should bring this serious agenda to their conferences, meetings, consultations and should device short and long term plans to tackle the challenges. There should be experience sharing and benchmarking good aviation models come next. After that, adapting the best calculated practice to their reality and implementing them can be a solution.
Despite the challenges in Nigeria’s aviation industry, Ethiopian Airlines has remained resilient and has expanded its routes. What is the attraction? And what’s your long term and short term plans here in Nigeria?
As Ethiopian is a Pan-African airline, serving our beloved continent Africa has always been a source of pride for us and it will ever be. In line with our long term strategic roadmap, Vision 2025, expanding and availing a more efficient intra-African network will remain at the core of Ethiopian and we have to play the positive role in catalyzing the socio-economic development of our continent.
You noted that most of your operations in Africa are not solely guided by profit, there is this obligation to serve. How do you evaluate your operations in Nigeria and looking at the performance of Nigerian airlines, what advice do you have to give for them to operate efficiently. And do you think having Maintenance, Repair and Overhaul (MRO) locally will be critically important for Nigerian operation?
Not all of the routes in Africa are profitable, but each of them has little contribution to the overall traffic. All the routes in Nigeria have their contribution to that traffic. We have the largest number of passengers from the continent from Nigeria. Number two, whatever you lose from here you subsidise it from the other and with that we serve the whole continent as one piece.
But without having Nigeria to your network doesn’t work because that is the biggest chunk of the market. Because the people are very mobile and it is the largest population on the continent. It is because there are a lot of airlines there and because of competition the yield is very low and the operating expenses in Nigeria are very, very high. But the entire network contribution is very good; plus we have that civic duty of ours. When we started our commercial tag line was bringing Africa together, that was 72 years ago. At that time there was no African Union and we were talking about bringing Africa together, now having established the largest network in Africa, we have succeeded in that civic duty of ours to our own continent. Now we are linking Africa to the rest of the world. Our current commercial tag line is the new Spirit of Africa. Why the new, because people perceive Africa as a place of conflict and problems. But now Africa is an emerging economy with one billion young population, endowed with natural resources, human capital, ready for foreign direct investment. So the New Spirit of Africa is completely different, it is an emerging continent, so now we want to play our role in facilitating that. So it is not only counting profit and loss but as a whole the entire network contribution need to be regarded as one. MRO is very important because aviation without MRO is incomplete. This is because the aircraft needs to be maintained, it has A checks between every cycle and then B and C checks are there. If we were doing our aircraft checks with other aircraft maintenance facilities and other things, they will be charging us hands and legs and it is not going to be sustainable. So we need to be very careful about being self-sustaining when it comes to maintenance. And as we earlier said, safety is paramount so the maintenance needs to be considered very seriously. That is why Ethiopian Airlines has maintained its own MRO. It maintains all aircraft not only for itself but also for Gulf and African carriers. Ethiopian airlines is an aviation group, it is a complete aviation group, it is not just an airline, it has its own maintenance, cargo, domestic network, its own international network, its own catering, and ground handling. So we cater for all airlines operating to Ethiopia. There is a choice for any business make or buy, should I procure catering or should I do it myself. Should I do ground handling or I should outsource it. For those Ethiopian airlines chose to do those in an integrated way because we are an aviation group and we supply this service for ourselves and for others including the training. Unless you have trained aviation personnel who are able to maintain the aircraft, able to fly the aircraft then you have to depend on foreign skills and that can be very expensive.
What do you think aided the actualisation of Ethiopia Airlines Vision 2025, considering the fact that you have almost done over 80 percent of your plans?
The number one factor is having a clear strategy, clear matching order that is not vague. So where we are going tomorrow, today we are planning for it. The plan includes infrastructure, fleet planning, human resources management, systems procedures. Whatever we have to plan for tomorrow we do those things today, this is our four pillars. In terms of human resources, we have been recruiting and we have opened up the largest aviation academy in Africa and that is recruiting pilots, flights engineers, cargo logistics, aviation finance, marketing and sale and what have you. In systems and procedures, Ethiopia Airlines is adapting the SAAP (System Application Products) system integrator, and so we have clear policies and procedures for everything to reach that vision 2025. And number three is fleet planning We have been planning our fleet much earlier and we have been doing negotiations with Airbus and Boeing and bringing the right sized fleet to launch to all the destinations we have been planning to go. We also plan the human resources management, performance management, training, fulfillment and all these things for our more than 12,000 employees. And as I said earlier, the strict corporate governance which precludes and disallows any kind of mismanagement and the government is also not interfering in any of the things that we are doing. Although Ethiopian Airlines is 100 per cent owned by the government, the government has given 100 per cent autonomy to the senior management of Ethiopian airlines to conduct the business without any interference. So those things have been the factors that are helping us to achieve and beat our own plans for the future.
Do you think Open Skies Africa will succeed?
Africa is one continent, people are talking about Africa Union, so free skies for African carriers, and this has already been ratified and agreed by all individual governments. Some have applied it some have not, so when we have that challenge of blockade of traffic right in some places in Africa, what we do is that we try to surmount that problem with a bilateral negotiation with that particular country. Some of the African countries while granting free skies to other airlines which are coming from overseas; are not giving it to their fellow African airlines. Because of that, as I am speaking, more that 80 percent of Africa’s air traffic is uplifted by non-African airlines. All African airlines put together have only 20 per cent of the market share in Africa, it is very unfortunate. So our bid is to ensure that Africa’s traffic is distributed by African airlines. That is why we are establishing regional carriers like Asky Airlines in West Africa, Malawian, now we are in discussion with numerous African airlines to do that, so that they can integrate the regional traffic and then we do traffic feeders, that way we try to stimulate Africa’s energy to defend Africa’s traffic for Africa’s airlines. So Yamoussoukro Declaration is very important. And whoever has not been doing it, it is high time for them to come to terms and apply that.
What was the reason behind Ethiopian Airlines’ decision to use an all women crew for one of your newest aircraft in your fleet recently; was it more of a gender thing or a Public Relations stunt or a business decision?
You know we are all in Africa in the sense that our mothers, sisters, daughters and wives, half of us are women. But in our culture in Africa there has been a long history of loving them but at the same time looking down on them. So we just want to dispel and break the stereotype that women are not able to handle everything and anything even a hi-tech machine like a new Boeing or Airbus or whatever equipment, to fly it, engineer it, to operate it and to conduct it. So we just wanted to show that because I heard some people talking about the history of Adam and Eve, people say that Adam must be a white man because if he was an African he wouldn’t have listened to his wife. So our sisters are people to listen to and they are able to do everything and anything, so we just wanted to show in our own continent in Africa that the role women play is something very big and also to show to our brothers in the continent that our sisters are capable of doing anything and everything. Number two, by so doing, directly or indirectly there is public relations advantage of it because people who are in the gender cause, which is called social cause marketing, they appreciate what we are doing and they try to decide to do business with us. So that is an added advantage. Even our mother Africa we call her a She. Why do we use feminine gender to refer to our country? This is because it is more affectionate. It has a Public Relations angle although the primary aim is not that but in addition it has that public relations angle.
What are your reasons for establishing your cargo facility?
You know Africa has a lot to export to the rest of the world be it fresh produce. Now if we talk of fresh fruits from Nigeria for example, in fact we have a plan, if there are produce like mango, pineapple and others; if there is guarantee in supply, we are ready to carry it to Middle East, Asia, China and other destinations. By way of import also, Africa imports a lot of technological things like mobile telephone equipment, computer parts, automotive parts and the rest of it. So for those we are trying to attract a lot of foreign direct investment like LG, Samsung and the rest of them to have their regional logistic hub in Ethiopia. This is because geography also allows them to come directly here and from here because we have the largest Africa network in the entire history of aviation, more than 55 destinations in the continent, daily routes, cargo as well as food freight. We have a lot of freighter aircraft, 100 ton capacity, Boeing B777LR. So with that we want to distribute from this regional distribution hub to the rest of Africa and also to take Africa’s produce and airlift them to Middle East, Asia and Europe. So that way Africa will not only be an importer but also an exporter, so the trade balance will be okay. And with that Ethiopian Airlines wants to play it role as the new spirit of Africa, it wants to take Africa’s produce to the rest of humanity and also bring other countries produce to Africa. So for that we need to have 800,000 tons of cargo capacity per annum with electronic transport, cool storage, valuable storage and the rest of it that is why we built that cargo facility.
