Africa: ‘Cooperation, not rivalry, is the solution for Aviation in Africa’
‘Cooperation, not rivalry, is the solution for Aviation in Africa’
A national carrier is home-grown. It serves the interest of the people at all times. Having a national carrier would create employment opportunities and African countries should have their own carriers.
What does it take to run a national airline?
Running a national carrier like Ethiopian Airlines is a rewarding but demanding task particularly this time where there is unfair market share and severe competition on the continent, from the Gulf carriers. Knowing the domination of the non-African carriers over the indigenous African carriers in our continent is painful; it also depicts the toughness of the industry. Therefore, one can easily understand how demanding running such an industry is. So, managing the aviation industry takes a lot, including but not limited to, long-term planning, dedication, energy, skills, team work, innovation, being proactive and decision taking among others.
What advice would you give Uganda on plans to revive a national airline?
A national carrier is home-grown. It serves the interest of the people at all times. Having a national carrier would create employment opportunities and African countries should have their own carriers, which will employ Africans in maintenance, catering, cargo, airports, and the academy, among others.
So, we have to make sure Africans get the benefit of the fruit of African development. For that reason, I would advise Uganda to cooperate with existing national careers to make sure the jobs remain in Africa.
We believe in partnerships to create multiple national carriers in Africa. Our main target is to succeed and grow along with our African counterparts by playing our part in transfering knowledge, sharing experiences and training.
If Uganda Airlines is revived, how will this affect your operations?
The air transportation market in Africa is untapped and has vast space to play fairly, especially for domestic carriers. Our successful collaboration with our two partner airlines in Africa – ASKY and Malawian Airline is a vivid testimony that cooperation, not rivalry, is a solution to serve Africa, in the air transportation sector that has been dominated by the non-African carriers. According to AFRAA (African Airlines Association), currently more than 82 per cent of the African travel market is dominated by non-African carriers, leaving less than 20 per cent for home-grown indigenous African airlines.
What are the challenges facing the aviation industry in Africa? How have you mitigated them?
The African aviation industry is generally characterised by lack of well-developed airports and ICT infrastructure. African countries have a low stock of infrastructure, particularly in transportation and the potential for information and communication technologies (ICTs) has not been fully harnessed. These deficiencies have constrained gains in domestic productivity and present a critical bottleneck towards the growth of regional integration.
Another challenge is the slow pace of African Open Sky Agreement. The liberalisation of African skies is also a huge challenge for the growth of the aviation industry in Africa. It demands for a renewed political commitment from the continent’s leaders to realise liberalised African skies in accordance with the African Union Agenda 2063. Continuous lobbying is required for the creation of a single African air space and for aviation to be treated as a strategic public asset by mobilising the African Union Commission, industry actors and governments.
High charges associated with aviation are another challenge. Aviation in Africa is being taxed like tobacco and alcohol. The price of jet fuel is twice the global average and other fees for overflying, aircraft landing and parking are exorbitant. This makes African airline face unfair competition from Gulf-based airlines, which have access to government subsidies and cheap fuel. Lastly, the failure to cooperate is the major obstacle for the growth of the African aviation industry.
Gaining market access within Africa can be more difficult for African airlines than foreign carriers.
What solutions should African national carriers adopt to solve these challenges?
Ethiopian Airlines along with African Union, AFCAC, AFRAA and all African carriers are pushing for the implementation of the Yamoussoukro Declaration (YD). It is geared towards a comprehensive reform of the air transport industry and the unification of the fragmented African air transport market. With this open sky agreement, it is believed it will allow more African carriers to serve their own land than the non-Africans. In addition, Ethiopian Airlines has invited African carriers to use its modern and expanded aviation academy to train their personnel in all areas of aviation professions.
What are your future plans for the market?
Pursuing Vision 2025, Ethiopian Airlines, by then, will be a world-class African airline with a fleet size of more than 140, flying 22 million passengers, uplifting 820,000 tonnes of cargo flying to more than 146 destinations, generating $10 billion in revenue and $1 billion in profit.
Through Vision 2025, Ethiopian Airlines will be transformed into an Aviation Group comprising of seven profit centres: Ethiopian International Services, Ethiopian Regional Service, Ethiopian Cargo, Ethiopian MRO, Ethiopian Aviation Academy, Ethiopian In-flight Catering and Ethiopian Ground Services.
The implementation of the YD will help the African carriers to own more traffic rights and cross-border airline cooperation that can improve the market share and future prospects.
How have you been able to expand and remain profitable?
Ethiopian Airlines has grown in leaps and bounds over the past decade, establishing itself as adept in all facets of the aviation industry, technology leadership, network expansion and aviation mentoring.
Dedicated and highly committed workforce at Ethiopian Airlines has also made it possible to grow. We also have a long standing strong corporate culture. The airline has nurtured dedicated employees and management, who do not consider their association with their airline as a simple contract of employment for a monthly paycheck; rather they consider themselves to be in a long-term mission of building a competitive global airline brand for their country.
Our Cost Leadership stance has also contributed a lot to our achievements, producing the maximum value proposition at the least possible unit cost in the industry. In this regard, we have also a continuous cost-saving programme which enables us to observe any cost reduction ways in any of our working areas.
Another reason is a clear relationship with the Ethiopian government. Ethiopian Airlines is 100 per cent government owned. But ownership and management of the airline are completely separate. Management is handled by seasoned aviation professionals who run the airline on the standards of a normal profit-making business enterprise.
How has Ethiopian Airlines performed on the Entebbe-Addis route in the last financial year?
During the fiscal period from July 1, 2015 to June 30, 2016, our passenger revenue increased by 16 per cent. 35 per cent of our passengers are on our frequent fliers programme (FFP), a record high compared to last year 18 per cent FFP membership number.