Aviation: Lack Of Corporate Governance, Indiscipline, Responsible For African Airlines Collapse – Hailu
Mr. Esayas Hailu is the Managing Director, International Services, Ethiopian Airlines. Hailu who before his elevation, was once the General Manager, Nigeria for Ethiopian Airlines for several years. In this interview with some select aviation journalists, including, OLUSEGUN KOIKI, in Addis Ababa, Ethiopia, the headquarters of the airline, Hailu spoke on the recent accident of the airline on Boeing 737-Max 8, future plans and the challenges and prospects of the African aviation industry. Excerpts:
What is the impact of the Boeing 737 Max 8 on your operations and how have you been able to weather the storm?
The Boeing 737 Max 8 accident of March this year, had a lot of negative impacts on our operations. But, before I go further, I want to say it here that I have a lot of respect for the general public of Nigeria, the government and the Nigerian media because they have been standing by us during that period of crisis. Also, in terms of allegiance the African continent was really superb.
The first impact was that we lost irreplaceable lives of our passengers and crews. It has been so depressing. We all worked in the emergency situation for the first one week, sleeping on the field and handling everything starting from the media, logistics, rescue operations and others. The second biggest loss to us, was the aircraft. We lost one of our five Boeing 737 Max 800 aircraft. The third loss was our brand, but finally, we found out that the entire world had a good sense of allegiance to us and everyone knew it was from the design deficiency that we had the crash. Even, Boeing came out to apologise officially to us.
Western media have this habit of disparaging African companies, African brands, but later, Boeing itself came out and even the Federal Aviation Administration (FAA) of the United States, acknowledged that it was a design problem.
Finally, our commercial brand even emerged stronger because the public confidence to travel with us has not been affected right from the next day onward. The only thing we did was to change our flight ET 205 to ET 318, which is our early morning departure flight to Nairobi. We just changed the flight number in the memories of the lost ones.
We have been coping with the machines that we have left. Of course, in the future, we don’t know if we are going to receive our remaining orders, which is the total of 27 that we ordered for. That will only be determined with the outcome of the adjustment of the aircraft system, the FAA accrediting it and all airlines flying it.
Ethiopian Airlines even has a simulator for the aircraft. Most American airlines don’t have simulator equipment for the Boeing 737 Max 8, but we do have. So, our pilots have been getting all the trainings that were required even before now, but, we have to see everybody doing that and it must have been tested and trusted and all the trainings and precautions must be fulfilled before we fly it again.
Ethiopian Airlines has vowed to be the last to fly that aircraft brand after the entire world has tested and trusted it. That is what we are planning to do. So, the impact has not been easy, but with the support of the populace; fellow Africans, international community and others, we have been able to move on and our brand has emerged even stronger.
Sir, if you have a choice, will you rather choose another aircraft brand apart from B737 Max 8?
Each and every aircraft brand has gotten its own mission; some are for the long, medium and short ranges. There are different aircraft with different missions and B737 Max 8 has been designed to be fuel efficient. So, if Airbus also brings aircraft with such a mission, we are going to be using that also, but our fleet is highly diversified from Airbus and Boeing. All the aircraft we have are for different missions. So, as long as there is any other aircraft, which fulfills the same mission and the same economies, of course, we are going to take it.
We also have the Airbus A350 and others and Ethiopian Airlines has been the technology leader on the continent. As we are speaking, the average age of our aircraft is only four years in more than 100 aircraft. Also, Ethiopian Airline has been the very first in introducing jets into the African skies; the B707, B727, B767, B757, B787, B777, all of them, we were the very first to bring them to the African skies, we have been technology leader. This is to give good value for our consumers and to be able to compete in the global aviation industry.
Of course, it is very expensive to acquire an aircraft. Only one aircraft can be as high as $150m. So, it is not a small amount of money, but it is for the commitment that we have to give a dependable global standard air service. That is why we have simulators of all the brands that we have and we give our pilots and engineers, the very best training. We also maintain the aircraft, apart from flying them. We do all the maintenance of our aircraft all by our self and for the other carriers.
We train pilots, mechanics and hostesses, cargo logistics, leaderships and marketing. Our training centre is certified by the International Civil Aviation Organisation (ICAO), International Air Transport Association (IATA), IATA Operational Safety Audit (IOSA) and others. We give high emphasis for training and state-of-the-art technologies.
Is Ethiopian Airlines looking forward to acquiring the upcoming B777X may be to replace the B777ER, B777NR?
The B777X is in our radar. We have the technology to operate it. So, it is under evaluation. If the outcome of the evaluation is good for us and fits into our mission, definitely, we are going to take it. But, as we are talking, it is still under evaluation and decision is not yet embarked upon.
What is the 2019 projection for Ethiopian Airlines and what are your plans for the Nigerian market?
We have a lot of plans for the Nigerian market; first of all, we fly into four gateways in Nigeria; Kano, Enugu, Abuja and Lagos. This is because we want to give the best values to our customers. Many people used to either drive or travel by air to catch a flight from Lagos to outside the country, but we have to close that gap.
Also, Mur tala Muhammed International Airpor t (MMIA), Lagos is getting highly populated at the peak of operations. The parking space, arrival and de parture halls are becoming smaller for the travelling public. So, in order to reduce the burden on the MMIA, it is good to divert the traffic to everywhere. When we airlift these people from where they are, we are creating convenience for them and also giving them justice.
We flew to Kaduna Airport for almost three years, but the traf fic volume has not been forthcoming. We spent a lot of costs to develop it, but because it is in between Kano and Abuja and we fly to the both of them, so, its economic sense has not been guaranteed. So, we have to suspend the route for now, but whenever the economics justify it, we are going to resume flying there.
On the economic projection for 2019, the second traffic to Lagos is being planned. Also, there is a plan to connect Lagos across the Atlantic to the US, but of course, everything is subject to the approval of the Federal Government.
Ethiopian Airlines is an und isputable leader on the continent, what is it that you are you doing differently from others?
First, it is all about long ter m planning and the Vision 20:2020 and now, we are going into Vision 20: 2035 from 2020, which is another 15 years of strategic planning for us.
So, long ter m plan requires fleet planning, age of fleet, Human Resources, system and resources, facility planning, catering, cargo and the academy planning. Everything has to go into it. So, our long ter m planning has been the root of our successes.
Secondly, the autonomy from the Ethiopian Gover nment, despite being 100 per cent being sponsored by the gover nment is another means of our success. The airline is allowed to be run in ter ms of industry without meddling in its commercial r unning and whatsoever.
The third one is that we always emphasis on new technologies, which are part of our success. We have new aircraft, new fleet, young age fleet and others. Also, the management is very prudent, strict with cor porate governance reigning supreme. When it comes to safety, security and transparency, decision and employment, there is no interference.
Everything is by merit. These are some of the elements that are part of the success of the airline and we share experiences with our African carriers and we are trying to sell the model to them. But, we discover that some of these strict corporate governances may be strange to some African airlines because as a big boss, you feel no one should ask you questions and you can do anything without being queried.
What is the contribution of Ethiopian Airlines Groups to the Gross Domestic Product (GDP) of Ethiopian economy?
Ethiopia Airlines contribution to the country’s GDP is about 4 per cent because the Ethiopia annual GDP is quite big. For example, in terms of US dollars, is about $350bn. Ethiopian Airlines annual revenue is about $4.5bn to this GDP, but if we add the entire group to it, it’s about $5bn per annum, but by 2035, we want to be a $10bn revenue company.
Is there any partnership between Ethiopian Airlines and the Federal Government of Nigeria on the proposed national carrier for the country?
There have been attempts to invite foreign airlines to participate with the Federal Government of Nigeria on the new national carrier project and Ethiopian Airlines has always been participating on that. So far, we have not been picked, but we are able, capable and ready whenever the vacant is available. We are ready to come and cooperate with Nigeria on that.
Also, Nigeria has been a very good host. First, with the population, which is the demographic dividend and the most precious resource is the human resource. Nigeria is the largest Africa population and it is also the largest economy on the continent. Mobility is very high; local and foreign. With this, Nigeria really requires its own national carrier. So, we wish them a success on the project. If we are requested to come onboard, we are ready and willing to do that and any partnership that is required, we will welcome it.
Recently, some foreign airlines were accused of conniving with drug barons to wrongly plant drugs in the check-in luggage of unsuspecting passengers, what is your reaction to this?
We have always been very careful about this. We go extra level to enhance security at the airport, paid for by Ethiopian Airlines for both arriving and departing baggage and we have Baggage Request Electronic System (BRES), which enhances security for baggage. Also, for luggage going to Saudi Arabia and other places, we cooperate with the National Drug Law Enforcement Agency (NDLEA) and other security outfits. We have such bags screened by their officials and when they say the luggage are clean, we take them onboard especially those that are going for pilgrimage.
In addition too, the Federal Airports Authority of Nigeria (FAAN) works with us in the area of security and we still have our own security outfit that we engage. We still cooperate with relevant authorities.
What is your advice for the development of African aviation industry, especially the airline sub-sector?
As I have mentioned earlier, our advice should start from the African Governments. In the past, people have always say that government should not involve itself in business, but that has been disproved. It all depends on how you manage it. The equity and ownership structures don’t matter. For instance, Ethiopian Airlines has been managed by the government 100 per cent and it’s working properly. First, the African Government should not meddle in the aircraft acquisition process, management and employment of people.
This should not be allowed because airlines have their commitments to their customers. Also, the governments should cooperate with each other, adopt the African Union (AU) recommendation for the Single African Air Transport Market (SAATM). It is when they cooperate with each other that they can defend African traffic for African airlines because there is a lot to attack from the outset. There should be long term planning by the governments. Those are the key elements to having a successful airline by any African nation.
How have you been able to grow your tourism industry with that of aviation?
They go hand in hand; Ethiopian has got more than 10 United Nations Educational, Scientific and Cultural Organisation (UNESCO) registered tourism sites. Ethiopia stands out as one of the very few countries on the planet in terms of UNESCO tourism sites. This shows that ancient civilisations are big on the continent. We have the Ethiopian Express, which is the strategic business unit and has 22 destinations domestic carriage.
Though, Nigeria and South Africa are the first and second largest domestic aviation on the continent in terms of passenger boarding, but in terms of domestic network, Ethiopia is the largest because we have 22 domestic destinations. That is to the tourism sites. We bring tourists from all over the world to Addis and take them to 22 destinations domestically, which has been helping to promote tourism.
Also, we export commodities like fresh meat to the Gulf States, flowers to Europe and China and others. Ethiopian Airlines is contributing largely to the tourism industry by bringing passengers and exporting commodities. It is a symbiotic relationship between the two.
Ethiopian Airlines is one of the very few carriers pushing for the full implementation of SAATM, while other airlines and African Governments are reluctant with its implementation, why is this so?
The fact is that Africa contributes only 3 per cent of the total global air traffic and if you take that that as 100 per cent, other foreign airlines take 80 per cent of it, while the remaining African airlines only take 20 per cent of the total traffic. So, instead of taking advantage by the airlines from the big pie, the best for us is to take the big pie from the situation. So, the assumption that Ethiopian Airlines and a few others will take the market from other African airlines is misplaced. The best we can do is to help each other and cooperate with each other.
Out of this 20 per cent, Ethiopian Airlines have 50 per cent of the total traffic by African carriers.
What are the Corporate Social Responsibilities (CSRs) of Ethiopian Airlines to countries it flies into?
First, whatever country we are flying into, we ensure total air connectivity for cargo and passenger. That by itself is a big CSR. Also, in every country we operate into, we pay taxes. For instance, in Nigeria, we pay our taxes regularly. We also create employment, export their cargo like textiles from Nigeria to other countries of the world.
Also, even when some countries on the continent are in wars, we take a lot of risk to fly in there. We don’t boycott them unlike some western airlines that will immediately abandon them. Also, we have been helping Rotary Clubs to carry out many of their projects in the country and any other countries free of charge. Primarily, we are a commercial company and whichever country we fly into, we participate in their developmental projects.
How has the multiple entries you operate to Nigeria helped you to remain in the business?
The multiple gateways reduce the inconvenience for passengers and boost services to them. It also reduces the burden on Lagos airport. It gives another room for the airport to accommodate other airlines, passengers and users. It also creates employment at different stations for ground handlers, immigration, customs, business centres and others. So, it’s a win-win situation for everybody.
You recently increased the cargo capacity of your organisation to meet the increasing demands of your customers, how has this improved your services to your clients?
Right now, Ethiopian Airlines operates 11 cargo flights and we have 55 route cargo networks to all over the world, starting from Miami, Mexico, different parts of China, India, Bangladesh, Europe and Africa. We have cargo destination and origin in Africa. So, 55 full cargo destinations and about 450, 000 tonnes per annum and 115 passenger destinations with wide-body aircraft. We are upscalling it, diversifying to North America, Europe, North, East Asia and Africa.
By Olusegun Koiki