Shining High In The Sky
A Conversation with Tewolde GebreMariam, Chief Executive Officer, Ethiopian Airlines
In 2013, IATA ranked Ethiopian Airlines as Africa’s largest carrier in terms of revenue and profit. This was a significant milestone for Ethiopia’s 69-year-old flag carrier, whose revenues exceeded US$2 billion.
“2013 marks a milestone year in the history of the Airline,” said Ethiopian Airlines CEO Tewolde GebreMariam in a press release. “For the first time in our long history, we are No. 1 in Africa in terms of revenue and profit.
“This success is the result of the collective efforts of the board of directors, management and the entire 8,000 plus Ethiopian Airlines employees, who toil night and day to make our beloved airline shine high in the sky. It is also a validation of our fast, profitable and sustainable growth strategy, dubbed Vision 2025. It confirms that we are well on track to achieving our Vision 2025 strategic goal of becoming a major global carrier with US$10 billion in revenue by 2025.”
During its nearly 70 years in operation, Ethiopian Airlines has become one of the continent’s most prominent carriers, unrivalled in Africa for efficiency and operational success, turning profits for almost all the years of its existence.
Beyond providing air transport to business and leisure travelers, the airline is committed to improving the lives of the country’s citizens and contributing to social development of Ethiopia. Earlier this year, Ethiopian Airlines joined Boeing and three non-profit organizations to deliver more than 4,000 pounds of medical supplies and equipment for charities and hospitals in Ethiopia and neighboring Somalia.
“Ethiopian Airlines continues to be a leader in corporate social responsibility activities in Ethiopia,” GebreMariam said. “As the flag carrier for the country of Ethiopia, we are viewed as not only an Airline but also as a source of vital service for the people of Ethiopia. We are proud and honored to work with Boeing to help our people and country where we have such great needs. With this delivery flight, we are also very happy to facilitate the supply of much-needed medical supplies in neighboring Somalia, as well.”
Additionally, as part of its social responsibility program, Ethiopian Airlines is actively engaged in the greening project by planning one tree for every passenger it flies.
GebreMariam has big plans for the airline. In a recent interview with Ascend, he talks about the key contributors to the airline’s success today, and where he plans to take the airline in the future.
Star Alliance Member
In December 2011, Ethiopian Airlines became the third carrier based on the African continent to join Star Alliance. The airline’s CEO, Tewolde GebreMariam, was joined by top alliance officials dressed in Ethiopian national attire to mark the event.
Question: You credit your customers for the success of your airline and the milestone of becoming Africa’s largest airline in terms of revenue. What are some of your biggest differentiators that garner such a loyal following?
Answer: We offer the highest number of destinations in Africa, operating daily and double-daily flights to 49 cities. We have created convenient connectivity within Africa and the rest of the world, making it the continent’s largest passenger network. We follow a multiple-hub strategy to make connections between destinations in Africa as smooth and hassle-free as possible, using our three hubs in Addis Ababa, Lome and Malawi.
We maintain our pioneering role in the continent in all areas of the aviation sector. We invest in technology and offer our passengers the best available technology the industry has to offer. For example, we became the first to own and operate the Boeing 787 Dreamliner aircraft in 2012, and the Boeing 787 simulator this year.
We offer our passengers African hospitality on board and on ground. As a testament to this, we won the Passenger Choice Awards for ‘Best Airline in Africa’ for the second time in a row at last year’s APEX 2014 EXPO as a result of online votes from millions of passengers.
Q: What types of customer-experience initiatives do you have in place to ensure your customers are treated with upmost care from the time they book a flight until they arrive at their final destination?
A: We view customer service as our strongest competitive advantage. The unique Ethiopian hospitality coupled with the humble nature and tolerance of Ethiopian culture serve as an excellent ingredient to deliver superior and unparalleled customer service.
At the same time, we continuously train our employees to go beyond the service expectation of our customers. We have a long-term customer-service training partnership with globally recognized Service Quality Institute (SQI), giving us the opportunity to change service mindsets and equip all our employees with the necessary best-practice tools and technology.
Q: What are some other vital contributing factors to the airline’s success?
A: First, the African market was ripe with lots of market opportunity, and we were prepared for it. Second, we took advantage of the strong economic growth in the Middle East and Asia/Pacific. Our geographic location gave us a good opportunity to connect Africa with these regions. Third, our multi-hub strategy enables us to harmonize our flight schedules to provide convenient, seamless and best-connectivity options for travelers.
Longest-range Dreamliner Operator
In 2012, Ethiopian Airlines became the first to own and operate the Boeing 787 Dreamliner. It is the longest-range operator of the aircraft, flying it the longest single direction from Addis Ababa to Washington, D.C., at 7,182 miles and to Toronto, Canada, at 7,143 miles.
Q: What significant changes have you made during the last few years that helped you secure the No. 1 position in Africa?
A: We implemented our Vision 2025 strategy, which has contributed significantly to our leading position based on changes we’ve made thus far. For example, in 2010, we had 59 international destinations. Today, we have 84, and our goal for Vision 2025 is 120. We’re clearly expanding our route network. Our fleet has grown from 32 in 2010 to 77 as of last year, with a goal of 140. In addition, we had 3.1 million passengers a year back then. Today, we have more than 6 million, with a 2025 goal of 22 million. So we’re making good strides, and I believe these developments have led to our No. 1 position, which I expect to sustain long term.
Q: How do you expect Vision 2025 to affect your financial standing?
A: I expect to achieve US$10 billion in revenue and US$1 billion in profit by 2025 as a result of Vision 2025.
Q: Traffic to and from Ethiopian Airlines’ home base at Bole International Airport has increased exponentially during the past decade, growing from 1 million passengers a year to 7 million last year. That number is expected to increase 18 percent a year during the next few years, making it necessary for airport expansion. What role does Ethiopian Airlines play in this expansion?
A: The Ethiopian Airports Enterprise owns all airports in Ethiopia, and it is investing US$250 million for the expansion of Addis Ababa Bole International Airport. As their biggest customer, we provide recommendations we believe will benefit the airports, our airline group and the traveling public alike. We have a good working relationship, and they take our recommendations very positively.
Q: Once complete, the expansion of Addis Ababa Bole International Airport will be equipped to handle 20 million passengers a year. What actions will you take when that capacity is reached?
A: Through our Vision 2025 strategy, we expect to have 22 million passengers a year, which is beyond the scope of the airport’s expansion capacity. As such, as part of a long-term strategy, we intend to move some of our operations from Bole to another airport.
New Head Offices
Ethiopian Airlines’ new headquarters at Bole International Airport was designed to meet the needs of the airline’s growth and dynamic operation, as well as help it attain its Vision 2025 strategy.
Q: Technology is an essential driver in moving the industry forward. What types of innovations do you feel are needed to take the industry into the next decade or two?
A: We believe in continuous product and service innovations in the areas of fleet, on-board products, facility expansion and IT infrastructure upgrades. I believe those are key areas of focus that will drive the industry forward. From Ethiopian Airlines’ perspective, we will focus on:
- Introducing a game-changing fleet – We are the longest-range operator of the Boeing 787 Dreamliner, operating the aircraft at the longest single direction from Addis Ababa to Washington, D.C., at 7,182 miles and to Toronto, Canada, at 7,143 miles. We were the second airline in the world to acquire this aircraft. In addition to the Boeing 787s, we operate ultra-modern and environmentally friendly aircraft such as the Boeing 777-300ER, Boeing 777-200LR, Boeing 777-200LR Freighter and Bombardier Q-400 with a double cabin.
- Educating and training – Through Ethiopian Aviation Academy, we will continue to give our pilots, aircraft technicians, cabin attendants, marketing and ground operations personnel the highest level of training. The Aviation Academy is one of the oldest and experienced training centers in the continent and the region, spanning more than five decades. Ethiopian Aviation Academy recruits 1,000 trainees a year, which is expected to increase to 4,000 by 2025.
- E-commerce – We introduced a mobile Short Message Service (SMS) information system for easy access to flight information and cargo tracking for local customers.
- Cargo – We play a pivotal role in the growing import/export trade through our technologically advanced aircraft. We own a cold warehouse with a 65,000-ton capacity per annum, and we are building an additional cold warehouse to meet demand.
- Maintenance – Currently Ethiopian MRO provides a wide range of maintenance services to customers in Africa, the Middle East and Europe, with more than 2,000 well-trained staff.
A significant part of our strategic growth plan, Ethiopian Aviation Academy and MRO are among the business pillars of the airline and are expected to generate 50 percent of their income from third-party service they offer.
The Ethiopian Airports Enterprise, which owns all airports in Ethiopia, is investing US$250 million for the expansion of Addis Ababa Bole International Airport. Once complete, the airport will be equipped to handle 20 million passengers a year.
Q: Becoming the most profitable airline in Africa was a significant feat. In addition to achieving your Vision 2025 goals, what near-term milestones do you aim to accomplish for your airline?
A: The construction of Cargo Terminal 2 is expected to be completed within the next year. It will have the capacity to accommodate 600,000 tons of cargo per annum, with cargo-apron parking capacity for five Boeing 747-800 aircraft at a time. It will also include cold-storage capacity to accommodate about 300,000 tons of temperature-controlled perishable cargo per year.
Completion of Cargo Terminal 2 will be immediately followed by the construction of Cargo Terminal 3, which will also have an annual capacity to accommodate 600,000 tons. The entire construction of the two terminals will have a capacity to accommodate 1.2 million tons of cargo per year, with capacity of eight Boeing 747-800 aircraft, placing the cargo terminal as one of the largest in the world.
The other milestone will be our aviation academy, which is the foundation of our success by enabling us to be self-sufficient in critical aviation areas. We continue to make heavy investments in this area because it is a critical pillar. During the last four years alone, we have invested more than US$80 million to expand both the scope of the training and the capacity of the academy.