Ethiopian Airlines is the fastest growing Airline in Africa commands the lion’s share of the Pan African passenger and cargo network, operating the youngest and most modern fleet to more than 130 international passenger and cargo destinations across five continents. Mr. Mesfin Tasew, who was appointed as Group Chief Executive Officer of Ethiopian Airlines in March 2022 says he plans to continue the airline’s growth in a sustainable way by continuously building its internal capacity and giving world-class customer service.
Mr. Mesfin Tasew, What Ethiopian Airlines long-term strategic roadmap?
“The airline has developed a long-term strategic roadmap, which is called Vision 2025. As we’re getting close to the end of this long-term strategy now, we have revised it to make it Vision 2035.
“We want this airline to be one of the 20 globally leading airlines by 2035. And this requires that it has to grow every year profitably.
“We aim to grow our destinations to 207 from 131. We anticipate that we need 270 aircraft; we want to grow cargo four times, to become one of the top 20 airlines worldwide.”
Mr. Mesfin, who was the successor to the former CEO of the Airline Group, Tewolde GebreMariam has been working with the airline since 1984 says Ethiopian Airlines will make a final decision on purchasing a new regional jet fleet and additional widebodies in the first half of 2023. He said:
“While the decision on new freighter aircraft could be delayed, the need to expand the passenger fleet is more pressing. Within the first half of next year, we should decide where to go. For both, wide- and narrowbody, [the decision] has to be made.
Regarding its widebody fleet, Tasew said the Star Alliance member needed more aircraft. The carrier is evaluating the A350-1000 and the Boeing 777X. he said;
“We will choose the widebody that fits best with our network, The Airlines must expand its cargo fleet of 14 aircraft. We have the plan to evaluate the A350F versus the 777XF.”
When asked if the A321XLR could also play a role in Ethiopian’s future, the CEO said:
“We hear that it is an excellent aircraft. Unfortunately, on the narrowbody side we operate more than 30 737s, which will grow probably to 50 by adding more 737-8s…
“The concern is, two different aircraft models of the same size will increase complexity and costs in terms of pilots, maintenance etc.”
Even when Ethiopian’s fleet size increases beyond the current 140, management would find it hard to justify having two different types of aircraft in a similar seat-size segment. “Because today we operate six different types of aircraft [and] our strategy is to have cost leadership, and to have this, you have to harmonize your fleet and to operate fewer aircraft models,” Tasew said.
“When we add either Embraer E195 or Airbus A220, we would have a seventh type in our fleet. We want to be careful in further fleet evaluation.”
The 787 and A350 will continue to be the backbone of Ethiopian’s widebody business, which will grow with more aircraft and additional variants. “The 777X would also be a new type of aircraft, for example regarding engines etc.” A decision on the 777X may come down to whether the cockpit crew cross-utilization that Ethiopian implements today between the 787 and 777 would also be viable if it upgrades to the 777X.
Ethiopian’s current orderbook includes six A350s, two 787s, 22 737 MAX family aircraft and five 777Fs on the freighter side.
Ethiopian Airlines completed its first passenger-to-cargo conversion of a Boeing 767-300ER in October. The conversion of the second aircraft is in progress and will be followed by a third aircraft. “Now we have the intention to convert some of the 777-200LRs into freighters,” the CEO said, adding that they became very expensive to operate for passenger services. Ethiopian’s four 777-300ERs will return to leasing companies in the coming years.
To grow it has to expand its network, it has to add new aircraft, it has to follow a diversified aviation group strategy.
So, under my leadership, my plan is to continue the airline’s growth in a sustainable way by continuously building its internal capacity and giving world-class customer service.
“Currently we are conducting fleet evaluation on the narrowbody side for 100-seater aircraft: the Airbus A220 and Embraer 195 E2,” Ethiopian Airlines Group CEO Mesfin Tasew told Aviation Daily at the company’s head office in Addis Ababa.
“We are critically looking at these two aircraft types to bridge the capacity gap we have between the De Havilland Dash-8 … and the Boeing 737s.”
Covid-19 and the war in Ukraine has been very bad for most companies. How have they affected your airline?
“During the Covid-19 pandemic, we successfully navigated the difficult times by identifying important opportunities.
“When passenger flights around the world were suspended due to restrictions imposed by countries, Ethiopian Airlines identified opportunities in cargo operation and forecast its operation to transport essential cargo, including medical supplies and test kits.
“We enhanced our cargo capacity by converting some of our passenger aircraft into cargo and that enabled us to generate enough money to continue operation through a most difficult time.
“In addition, we have been focusing on other business lines like MRO (maintenance, repair and overhaul) to repair aircraft and purchase of customer airlines to generate additional revenue.”
Will these define your forecast point as part of post-pandemic resurgence?
“Our passenger traffic has grown and now we’re back to passenger operation. By June next year, we aim to fully recover from the Covid period, to be back to transporting the number of passengers we used to carry before the pandemic.
“In parallel, cargo operation globally is showing some decline, particularly due to the impact of the Ukraine-Russia war and the Covid situation in China. Now we have reconfigured our aircraft back to passenger.”
You earlier spoke about plans to buy more aircraft as demand increases. Will that include the Boeing Max aircraft that had problems earlier on?
“We have close to 140 aircraft in our fleet, both passenger and cargo and we have slightly more than 30 aircraft on order, to be received in the coming two, maybe three-years’ timeframe.
“We are constantly revisiting our fleet strategy. We have a fleet strategy which guides us on which aircraft model or capacity to acquire, in which year. This plan is revised constantly depending on the market conditions.
“We don’t have any immediate plan to place order for additional aircraft but we are evaluating new aircraft models.”
Biggest Airline In Africa
Your airline is the biggest in Africa, having spread tentacles almost everywhere on the continent. Yet there are other airlines trying to catch up with you. How are you positioning yourself to match this competition?
“In the air transport industry, there is always competition between all airlines, both non-African and African. Unfortunately, the pandemic affected most African airlines badly but they are returning to the African air transport industry.
“We hope the African airlines get back on their feet at the earliest opportunity. The market is big. We have enough market to work together.
“But our main competition is not with African, but non-African airlines in the region, in Middle East and in Europe.
“We will continue strengthening our position in the global air transport industry to effectively compete wherever we fly by providing better customer service, being more efficient and providing a more dependable service.
“We encourage our African airlines to fully recover and in fact, we would like to assist them through different means. As long as they’re willing to work with us, we’re ready.”
Lately there have been problems with your programme in Nigeria. Perhaps you could speak about it.
“One way of contributing our share in development of the airline industry in Africa is to work closely with African governments to set up strong national carriers that can develop their national economies.
“We have a partnership with Malawi Airlines and recently we have setup and are live in Zambia. It is a still a baby airline. Upon the request of the Nigerian government, Ethiopian Airlines has started discussions to set up a Nigerian flag carrier. We have advanced significantly in our discussions on the partnership agreement with the Nigerian government and Nigerian investors.
“But some groups, mostly private carriers within Nigeria, were not happy with this arrangement and went to court claiming this new airline would affect their business. Our intention is not to kill or remove these airlines from operation. The Nigerian government’s plan is to have a dependable strong airline with a good on-time performance, good customer service and that meets the needs of the Nigerian public. We hope the issue will be sorted out and we can finalise our agreement to assist the Nigerian government.”
The African Airlines Association proposed that airlines be allowed to hop from one airport to another while picking passengers instead of having to fly back to their hubs before continuing their entire flight journeys in order to open the skies of Africa and make flying cheaper. What’s your view on this proposal?
“This AFRAA proposal is in line with the African Union initiative to liberalize the African airspace.
“We support this. It will enable all African airlines to fly freely from town to town and city to city within the same country or across the border, to grow their business and better serve Africans.
“Unfortunately, many African countries have been restricting traffic rights and preventing this from happening. But now many countries have agreed to implement the Single African Air Transport Market initiative. Airlines we benefit and the consumer will also benefit.”
About your resumption of flights to the Tigray region, how important is this to your business?
“The Tigray region is one of the administrative regions of Ethiopia. Among the 22 domestic destinations where the Ethiopian Airlines flies, three of them are in the Tigray region. Due to the conflict over the last two years, we had been forced to stop flying to the three cities. Now in line with the recent peace agreement, we hope the area will again become peaceful and Ethiopian Airlines will start flying to the cities. We are keen to start operating in the area.
“On the other hand, the domestic operation, in terms of number of passengers, is about 10 percent or less of the total number of passengers we carry throughout our network. Even though it brings some benefit to our operation, it is not a big determinant to our growth efforts.”
Which of the Africa regions do you think has been the best market for you?
“We have a strong presence in all parts of sub-Saharan Africa. We have been connecting West Africa to the Middle East and Asia, and to some extent Europe. We have been connecting south and eastern Africa, mostly to Europe, but also to the Middle East and Asia. South Africa is also important to our operation.
“Unfortunately, we don’t fly to northern Africa regions like Libya, Tunisia, Algeria and Morocco. We want to develop these markets.
“Ethiopian Airlines flies to most countries in sub-Saharan Africa, which includes West Africa, East Africa, South Africa, and of course Central Africa.”
Does the Ethiopian government have any control in the destinations you fly to?
“No. Even though Ethiopian Airlines is fully owned by the Ethiopian government, the airline is operating as a private commercial company without any interference in our daily operation from the government. That is what one of the key success factors that enable us to be successful.”