AIRLINES Ethiopian Airlines
International passenger services will drive turnover growth as part of Ethiopian Airlines’ Vision 2025
It comes back to development again.
He gives the example of Ethiopia’s flower industry, which after only a few years is beginning to rival Kenya’s as the biggest exporter to Europe. “It’s now a $200 million a year industry. It could not have grown as fast as it did without Ethiopian Airlines.” Meanwhile, a $500 million catering
facility opens this month, producing 80,000 meals a day. Vision 2025 also includes expansion of the airline’s training facility.
Aircraft on order (56 for delivery until 2019)
14 x Airbus A350-900s 10 x Boeing 787-8 and -9s
25 x Boeing 737 MAXs 2 x Bombardier Q400s 5 x Boeing 737-800s
Tourism potential
The airline also has a role to play in Ethiopia’s nascent tourism industry, which has huge potential. Ethiopia attracts only around 770,000 tourists a year (Kenya boasts around 1.3 million) and the plan is to reach 2.5 million by 2020. GebreMariam admits that Ethiopia’s sometimes negative image needs to be overcome but says there is much to promote, including world-class cultural and natural attractions. He adds that so far, “honestly speaking, we have not done a good job as a country or an airline”. The airline group is
clearly going to be a major part of Ethiopia’s economy in the next decade and a major foreign currency earner. Because of this,
GebreMariam rules out privatisation in the near
future. “The economic model [of Ethiopia] is one where the state
will continue to be the driver of economic development,” he says. Given the state of African aviation, it is likely Ethiopian will also continue to take a
18 ISSUE 4 ROUTES NEWS 2016
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leading role throughout the continent in the next decade. The potential for a new start-up or a resurgent rival is slim, GebreMariam believes, and he is predictably dismissive of any notion of a low-cost carrier (LCC) linking individual African states: “The inter-African market is small and fragmented. We did some research and found that the average number of passengers per day on city sectors within Africa is only 50.” Ethiopian’s average load factors bear this
out – in the low 70s compared with the global average of the mid-80s, but, says GebreMariam, they are aided by the airline’s hub connectivity – 65% of Ethiopian’s passengers are making connections at Addis. He adds: “There are no secondary airports
to cut costs and LCCs have the same fuel costs as us. Fuel is 40% of our total costs – we are paying $1.20 a gallon in Europe, but $3.50 in most African countries.” This last issue is one potential brake on Ethiopian’s own development, and GebreMariam is critical of the taxation that African nations impose on jet fuel, largely, he believes, because air travel is still seen as a luxury, not a tool for development. “This is a continent where air travel is
taxed more than cigarettes or alcohol. Wrongly, it’s considered as a rich man’s means of transport, but look at the ground – it is a very large mass with a very poor road and rail network. Aviation is an essential public service, but unfortunately African governments do not see it that way.” GebreMariam is lucky his own
government disagrees. “We’ve come through 70 years of challenges including wars while the last 10 have been very dramatic in terms of growth,” he says. “The fact that we have been able to grow very fast and meet global standards is a remarkable achievement. The airline is tested and proved.” £
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