Airlines owned by governments are more likely to be unsuccessful, unless they are managed independently, says Mesfin Tasew, group CEO of Ethiopian Airlines (EA).
“If airlines are owned by governments, we think [they] will be unsuccessful. They can be successful, but then they have to be managed privately and without any government interference.”
And it is undisciplined spending that is the death knell of many airlines.
“It is saddening to watch the demise of South African Airways (SAA), which has once been the strongest airline in Africa. We are willing and ready to help them with their problems, but such a request will have to come from them,” says Tasew, who became EA group CEO in March.
He stepped into the big shoes of Tewolde Gebremariam, who led the 75-year-old airline from mediocrity to being the largest carrier in Africa before he retired.
Before Covid-19, its fleet expanded from 33 to 130 aircraft and its passengers from 3-million to 12-million annually.
“We are proud that our airline has continued on its profitable trajectory for the past 17 years despite the pandemic. We are already back to about 80% of our capacity we maintained before the pandemic and should soon reach the 100% mark,” Tasew told Business Times.
Most African airlines are in trouble and some have not survived the pandemic. It has become clear that we all have to collaborate to survive, particularly in Africa
The airline also had to weather the crash of one its newly acquired Boeing 737 Max airliners in March 2019, with 157 people dying on a flight to Nairobi from Addis Ababa. This was the third crash in similar circumstances the 737 Max and prompted the temporary grounding of Boeing’s worldwide fleet.
Boeing has since adapted the aircraft’s design and pilot training. Ethiopian Airlines is one of about 41 international airlines that have since resumed operating the airliner.
EA signed an interline agreement with SA Airlink last year whereby passengers can purchase a single ticket and lower-fare tickets between points within the carriers’ networks. Tasew says the agreement is working well.
Among EA's successes are developing smaller airlines.
“Most African airlines are in trouble and some have not survived the pandemic. It has become clear that we all have to collaborate to survive, particularly in Africa.
EA has helped Asky Airlines operating from Lomé in Togo to grow consistently for the past 12 years, and it is now probably the top-performing airline in West Africa.
Malawi Airlines, which had a rocky start in 2012, has been profitable since 2014. EA operates it under a management contract and owns 49%. Earlier this year the airline announced R67m profit, despite the industry’s pandemic woes.
He attributes EA’s Covid-19 survival to its mantra of disciplined spending and an agile management model.
“When all the passenger flights stopped, cargo flights became crucial to transport medical equipment and supplies and other essential goods to keep the world functional. We optimised our cargo fleet and expanded it by removing the seating of our passenger jets to convert them into cargo planes too. When passengers could fly again, we just put the seats back.
The airlines strategy is focused on safety and customer-centric approach costs and developing its internal talent.
“Cost is the main driver of our business, especially now with the worldwide fuel crunch. Undisciplined spending is the killer of many airlines."
We always keep our eye on our strategic road map. Ethiopian Airlines is now the leading airline in Africa, but we want to be one of the world’s top 20. To achieve that, we will be expanding our route network
“We always keep our eye on our strategic road map. Ethiopian Airlines is now the leading airline in Africa, but we want to be one of the world’s top 20. To achieve that, we will be expanding our route network.
“In the short term we will increase our fleet with 20 to 35 new aircraft and in the longer term we want to double our fleet from 130 to 250 aircraft. We strive to be a global leader in passenger and cargo transport.”
To achieve that the company maintains an environment-friendly fleet that provides the latest technology and most cost-efficient aircraft.
Tasew says “Ethiopia has a unique culture and we have learnt the hard way that we fare better [by growing] our own people rather than appointing someone from the outside. I have been with the company for 38 years, starting at the bottom of the ladder, as do most of my colleagues.
“Experience within the company and the opportunity to rise to the top is the weakness of most other airlines. In the Western world a different culture applies, where senior managers are appointed from outside an airline. We are different, but we embrace our differences and capitalise from the strength [they provide].”
Non-African airlines now dominate the continent’s skies with 80% of all flights and only 20% serviced by African airlines.
“That is too small and we can change that. There is no reason all African airlines cannot flourish, but then we should all work together and pool our strengths. That is the only way we can make Africa shine.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.