Why Ethiopian airline is a success story in Africa—Hailu

Esayas Woldemariam Hailu, Managing Director, Ethiopian airline International services

 Esayas Woldemariam Hailu, Managing Director, Ethiopian airline (ET) International services, in this interview conducted at the airline’s headquarters in Addis Ababa, by a host of journalists from Nigeria, including The Travelport publisher, Sade Williams, says corporate governance, prudence and commitment to long term plan, among other factors, have helped in placing the airline on a high pedestal in Africa and the world in general. He says the airline is trying to instill these ingredients in the management of the carriers it is creating across the continent.

He reveals reasons why ET may not fly the B737 MAX8 aircraft again and how it is giving back to the communities it flies to.

Exerpts:

What is the impact of the MAX8 aircraft crash on the overall operations of ET?

We have a high level of respect for the Nigerian public, government and Nigerian media because they stood by us at that hard time and the sense of allegiance of the African continent was superb. The impact was this, the lost lives, our passengers and crew, irreplaceable human lives, it has been so depressive, all of us were in emergency situation for the first one week. Starting from the media, logistics and search and rescue operations. The second biggest loss was the aircraft, one of the 5 MAXs that we have, the third was our brand, but we found out that the entire world had a good sense of allegiance towards us and everybody knew it was from the design deficiency, even Boeing came out and apologised officially, even FAA also acknowledged that it was from the design. But finally, our commercial brand emerged even stronger. So that is exactly what we found out, because the public confidence has not been affected, right from the next day onward, the only adjustment we made was we changed flight  number ET 305 to ET 318 just to help peoples’ s psychology.  Also, the rest of the aircraft had been parked but because we have more than 100 aircraft, we have been switching, we have been coping. Of course,  in the future, we said we are going to receive the rest of the  order to have a total of 27MAXs but that will only be determined by the outcome of the adjustment of the aircraft system and FAA accrediting it and all airlines flying it, Ethiopian airline (ET) has vowed to be the last airline that will fly it, after the entire world has tried and tested it. The impact has not been easy but with all the support and the patronage of our fellow African brothers and sisters and the international community, with that, our brand has emerged even stronger.

So Are you saying if your pilots are well trained as usual,  ET would not fly MAX8?

 I repeat, when Boeing and FAA has reviewed and accredited it, the American , Chinese and European carriers have to first use it, and Boeing will come with a list of training, prescriptions and additional things, of course, we would fulfill everything, we even have the Simulator, American carriers are operating the aircraft, many them do not even have the Simulator, our pilots have been trained and getting all that is required for Max8 and even now, we have to see everybody doing that and after it is tested and trusted, we would fulfill all the training, precautions and requirements and then we will fly it.

Would you rather choose another aircraft type, if you have a choice?

Each and every aircraft type have got its mission, some are for long, medium and long range. There are different aircraft with different missions, MAX has been designed to be fuel efficient and up to 8 hours rage, it was supposed to be very economical with good density of seat, so if Airbus also brings that equivalent aircraft with that kind of mission, of course, we can use it. But our fleet is highly diversified, but from Airbus and Boeing, they are for different missions, as long as there is another aircraft which fulfils the same mission and the same economics, of course we are going to take it. The average fleet age is only 4 years for all the aircraft, Ethiopian airlines has been the very first to introduce jest into African skies,  the B747, B767, B757, B777, we have been a technology leader , to give value for our customers and the to be able to compete in the global aviation. It is very expensive to acquire and aircraft, only one can cost more than $150m, but it is all for the commitment that we have to give a dependable global standards air service, the diversifications, the training, the accreditations, training for other carriers, we also maintain our aircraft and for other carriers, we train pilots, mechanics, air hostesses, cargo logistics. So are centres are accredited by IATA, ICAO, EASA and others, we lay high emphasis on training and bringing the best the best technology.

Are you looking at using the upcoming B777X being a technology leader?

B777X is in our order, we have also already started evaluating it, if the outcome of the evaluation is very good for the mission of our network, we are going to take it.

Single African Air Transport Market (SAATM) seems to the be following the way of Yammasoukro Declaration (YD), can you allay the fears that if SAATM is fully implemented, established airlines like ET, Egypt Air or Royal Air Maroc would take advantage of this over young carriers?

I wouldn’t say so, Africa contributes only 3 percent of the global air traffic, that 3 percent taken as 100 percent, other airlines take 80 percent and African airlines only take 20 percent of this, so there is a lot more to attack, why do we have to scramble on that, instead of taking advantage airlines from that small pie, why don’t we go for the big, there is a lot to defend, so that assumption is completely wrong. There is a lot for us to help each other than to compete,  that is why ET is helping African countries to establish national carriers.

So, all of these put together, we have only 20 percent, we need to attack that 80 percent, 80 should be for African airlines, 20 percent should be non-African airlines, because that is our continent, that is our traffic, for more African carriers to come, the traffic which is not in the hands of African airlines is much more, so we have a lot  more to play with, it is not as if we are going to scramble for that 20 percent, we won’t settle for that same 20 percent, we want to contribute more than 3 percent to global air traffic and that is the reason Ethiopian airline going to African countries to help establish regional African national carriers.

For example, Chadian in Chad is in partnership with Ethiopian airline, we are in talks with Ghana, we have signed MoU and it is progressing, ASKY in Togo is more that 10 years, it is serving essential connectivity in the entire ECOWAS region, more than 20 destinations are getting connected by ASKY, Malawia in Lilongwe is in incorporation with Ethiopian airline, it is established as a national carrier and it is connecting the regions, Mozambique is also there, we are establishing corporation with Zambian airline. We are in support of African airlines either in technical or management. In technical, all technical support is given to RwandAir by Ethiopian airline, management and consultancy is given to Malabo.

All these efforts is aimed at positing African airlines to grow, thrive and dominate the 80 percent of Africa deserving traffic so that employment, tax, revenue, opportunities, capitals of the continent will not be flown away.

Right now, many of the African nations have been giving traffic rights to non-Africans but when fellow African ask for it, they deny them. In some places, people go from one part of Africa to another via Dubai or Doha, why? Even some non-Africans airlines are being given fifth freedom  traffic right to airlift and disembark passengers within Africa, without having to go through their home base but when such request is coming from a fellow African country,  they hesitate or deny, so SAATM is a very good solution for Africa to put its acts together and to thrive. So SAATM is the best thing that can ever happen to Africa, because air traffic connectivity is a fuel for   economy, cultural exchange and regional tourism as well as transactions.

Africa needs to buy and sell with one another, we need to do business with ourselves instead of building 30, 000 kilometers of train tracks, few kilometers of runway will connect people in the continent, to start with, when we are transacting with each other and creating jobs for each, then we have enough, then we can go to that. So, air transport is a big empowering factor for all economies , people and countries and that is exactly what Ethiopian airlines is trying to do in line with its connection slogan of ‘A new spirit of Africa.

African countries need to  imbibe the spirit of ‘Fly Africa Act’, ‘then there will be business for everybody on the continent in the next ten years.

 What are your 2019 projections and plans for the travellers on Nigerian route, being a major market?

There are a couple of plans, first, we fly into four major gateways in Nigeria, Lagos, Kano, Enugu and Abuja, and this is because we to give the best value for customers, many people used to drive or fly from other parts of Nigeria to Lagos, so we have to go to their doorsteps. Secondly, Murtala Muhammed Airport, Lagos is getting congested and to reduce the burden, it is good to diversify the traffic everywhere, it is more convenient for those people coming from their doorsteps, we are by so dispensing justice to all the geopolitical zones in Nigeria. We used to fly to Kaduna for three years but traffic volume has not been forthcoming, we have been developing it at cost and because it is located between Kano and Abuja, and we fly to both places, there is no economic sense, we have to suspend it but when the economics is justified, we are going to go there.

Our projections for 2019 is that second frequency to Lagos is being planned, there is also a plan to connect Lagos across the Atlantic to the United States, of course, everything is subject to approval of Nigerian government.

 In all standards, Ethiopian airline is the most sought after airline in Africa in terms of success, how can other airlines learn from this?

Firstly, it has to do with long term planning, ET has always been having vision 2010, 2020, and now we are scaling it to vision 2035, right from next year, another 15 years horizon for strategic planning. Long term planning requires fleet, HR, facility, Academy, cargo, ground handling, the catering, every plan has to go with that, you have to plan appropriate type of fleet, when and how to place order, our long term planning has been at the root of our success. Also the autonomy from the Ethiopian government allowing ET to be ran in terms of industry rules and regulations with no meddling on its commercial decisions. Thirdly, we always emphasize on modern technology, these new technologies are part of the success, young fleet and modern technology.  Management prudence and corporate governance, a lot goes into safety, decision implementation, everything is based on meritocracy, management prudence are some of the elements that form our success. So we also share experiences with those small airlines that we are setting up, we are trying to sell this model to them.

 What is the contribution of Ethiopian airlines to the nation’s GDP?

For Ethiopia’s GDP, it’s hardly up to 4 percent of Ethiopia’s GDP because Ethiopia’s annual budget is quiet large, it’s about $350billion, for Ethiopian’s airline annual revenue is about $4.5 billion together with all the airline’s group, it’s about $5 billion revenue per annum. But we are projecting it at the end of vision 2025, we want to be a $10 billion company, and after 10 years, we want to double our revenue.

Is there any partnership between Nigeria and  ET on proposed national carrier?

There have been attempts to offloads some bids for foreign airlines by Nigerian government , Ethiopian has always been participating in that but so far, we have not been picked but we are able, capable and ready and whenever the vacancy is created, we are ready to come . Secondly, Nigeria has been a very good host and by their share volume of the population which is the most precious resource, the largest economy, the mobility is very high, for that Nigeria really requires a national carrier, we wish them success, if we are required to support, we are ready and willing to do that, any partnership that arises from that is most welcome.

 How do you invest back into the communities/your destinations around the globe?

Whichever country we fly to, we give essential air connectivity for cargo and passenger. Secondly, in every country we operate, in Nigeria, we pay revenue tax. We also employ a lot of people in multiple places, so we create employment. We also bring cargo and export their products, in Nigeria, we take tie and dye textiles and other things to Eastern and Southern Africa. We are an all-weather friend, we don’t stop when countries are in trouble. In Angola, Zimbabwe, we supply food, medicines when all foreign airlines left, or else they would have been cut off from the rest of the world, it’s great risk but that is a great compatriotship and allegiance. We have been helping to fly doctors free of charge to Nigeria for eye surgery.

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