BY Paul Ndiho
September 17, 2012
Ethiopian airline is one of the most profitable African airlines in a troubled industry. The Air carrier is experiencing steady growth, despite the downturn in the global airline industry, the carrier flies to more than 69 International destinations including the United States.
Ethiopian Airlines celebrated another landmark earlier this year when it became the first carrier outside Japan to operate the Boeing 787 Dreamliner, a state-of-the-art passenger jet. The introduction of the 787 to African skies could transform the way passengers use air travel across the continent.
The government-owned carrier has become one of the Africa’s success stories. It is known for its efficiency and operational success and it also commands a lion’s share of the regional network including daily flights across the continent.
Kagnew Asfaw, Ethiopian Airlines, regional director for the USA and Canada attributes their success to the quality of training, time and money spent on employees.
“The main/key success factor is the employees that we have. We always say that other airlines could fly the routes that we fly, other airlines could buy the aircraft that we use; but the most important asset for us is that employees. We have a very highly skilled and dedicated staff – those are the main reasons why we are successful.”
To meet the growing volume of air travel, Ethiopian airlines added ten new planes their fleets. The additional passenger jets were financed with a $1bn loan from the Export-Import Bank of the United States. Ethiopian Airlines is also tendering for an additional 15 single-aisle jets to solidify its African presence. Zemedeneh Negatu, managing partner of Ernst & Young, Ethiopia, is a frequent flyer on Ethiopian Airlines and he says that without the airline, it would be impossible for him to do business.
“Every day, I get up and I say – if I have to country x in Europe or China, or the United States and now Canada; I don’t have to think twice about how I’m I going to get there. In most African countries as you probably can imagine, that would be a very long planning process because they have no airlines or they do its limited services. So with Ethiopian airlines, I think for people like me and most Africans to be honest with you has made traveling much easier and much more affordable.”
Analyst say that Ethiopian Airlines generally has a good safety record, its well-managed, and has consistently exceeded the profit targets set out in its strategy plans. But some critics say the company is unusual among state-owned African airlines, because it is able to raise its own debt and finance its own expansion without government cash. Mr. Negatu, notes that Ethiopia Airlines continues to be profitable because of its sound principles.
“Corporate governance and commitment of the employees. What do we mean by corporate governance? Even though it’s state-owned, it’s run like a business.”
Despite the success, many of the carrier’s passengers are unhappy with the airline’s customer service, and baggage handling. Kagnew Asfaw admits that they have had some problems left behind luggage, but he says the airline around the clock to rectify the problem
“In the U.S., we don’t encounter this problem because the luggage we receive from the customers is handled with care. But, in places like Dubai, Banjul, Beijing, customers come with up to 10-15 Baggage’s. So when someone comes with 10-15 baggage’s then you can only take what the aircraft can take. So yes, we have issues of left behind baggage.”
With the addition of the 787 Dreamliner to its fleet, Ethiopian Airlines, a State – Owned carrier, will be stiff competition for other African carriers– including South African Airlines, Kenya Airways, and other regional careers a run for their money.