Managing Director of Ethiopian Airlines International Services Mr. Esayas Hailu in this interview said Africa needs more airlines to end the current state of affairs in the region where 80 per cent of international passengers are airlifted by non-African carriers. He said the more airlines in Africa the better the connectivity as mobility is very huge among people of the continent.
What has been the impact of the B737 Max-800 air crash on the operations of your airline and how have you been able to weather the storm?
It had a lot of impact. By the way, we have a high respect for the general Nigerian public and Nigerian government and the Nigerian media because they have been standing by our side. The sense of allegiance in the continent was very super. The lost lives of our passengers, our crew, those irreplaceable human lives, it has been so depressing. All of us were in emergency situation for the first one week, sleeping there, sitting there, handling everything. Starting from the media, logistics, and rescue and search operations.
The second biggest loss is the aircraft; one of the five 737 Maxes that we have. But finally we found out that the entire world had a good sense of allegiance towards us and everybody knew that it was from design deficiency; even Boeing came out and apologized officially.
Fortunately, the accident did not have much negative impact on our fleet utilization and our load factor, mainly due to two reasons. The first one is the continued trust and confidence among the travelling public on our safety standard. The second reason is that March to May was slack season in our operation, so we could manage with the available fleet in our possession. We have more than 110 aircraft in operation currently, so we reviewed our fleet plan and swap capacity to optimize aircraft utilization. June to September is peak season in our operation, so we considered all options to mitigate aircraft shortage we may face during this period.
Finally our commercial brand emerged even stronger which was what we found out. The public's confidence to travel on us has not been affected.
If FAA certifies Boeing B737MAX MAX8 for operations will you start its operation immediately or will your pilots undertake more training?
The problem with the design of the flight control system of the B737 MAX and its redesign is under review by regulatory bodies and stakeholders. So, currently we can't comment on the resumption of operation of the fleet type.
But after any system adjustment, the Federal Aviation Administration (FAA) has to review, audit, test and accredit. After that the American carriers who are having that fleet and Chinese carriers, European carriers, all of them have to first use it. And also Boeing will come with a list of training prescriptions and other additional things. Of course we will fulfil everything. By the way, we even have a simulator for the aircraft. But we will be the last airline to do so.
You ordered 24 of the aircraft type, Will ET tinker with the order by choosing other Boeing aircraft types?
Actually the number of B737 MAX8 aircraft we have on order is 27. As the aircraft type and its flight control system is under review by regulators, it is too early to comment on this. But Max has been designed to be fuel efficient. It was supposed to be very economical. But our fleet is highly diversified both from Airbus and Boeing. So we have 787 Dreamliner; we have 737-800/700 and we have 777 LR and ER. So we have all of them and they are for different missions. So as long as there is any other aircraft fulfilling the same mission and the same economics, of course we are going to take it. Ethiopian Airlines has been a technology leader. As we are speaking, the average fleet age is just four years for all the more than 100 aircraft.
What do you think of the upcoming Boeing 777X? Do you have any plans of ordering them as a replacement for the current Boeing 777 fleet?
B777X could be a great aircraft, and we are evaluating it as possible replacement for the existing 777 fleet. So if the outcome of evaluation is very good for the mission of our network, definitely we are going to take it.
What is the 2019 end of year projections of Ethiopian Airlines and what plans do they have for their operations in Nigeria?
There are a couple of plans there. First of all we fly into four gateways in Nigeria - Kano, Enugu, Abuja and Lagos. This is because we want to give the best value for our customers because many people used to drive or fly from other parts of Nigeria to Lagos. So we had to go to those states. Secondly, Murtala Muhammed Airport in Lagos is getting highly crowded. So to reduce the burden of MMIA, it is good to divert traffic everywhere. And by diversifying to other states, we are also dispensing justice to all the geopolitical zones of Nigeria.
What of Kaduna? It has been suspended?
We used to fly to Kaduna but the traffic volume has not been forthcoming. We have been developing it at cost. We spent a lot of money developing it but because it is in between Kano and Abuja and we fly to both places, we felt it doesn't make economic sense and we had to suspend it for the time being but whenever the economy is justified, we are going there.
So the operation in Nigeria will continue with the maximum effort to give service with our most modern aircraft. We plan to grow more in Nigeria in terms of frequency and operation wise. The second frequency to Lagos is being planned. There is also a plan to connect Lagos across the Atlantic to the United State. This is also a plan, of course everything is subject to the approval of the Nigerian government.
What has been the secret behind the success of Ethiopian Airlines and how can other African airlines learn from them?
Number one is long term planning. We have a meticulously chosen business model and robust execution strategy. So, long term planning requires fleet planning, human resource planning, catering, the ground handling, the academy, cargo. We have self-sufficiency in training aviation personnel who embody the values and spirit of Ethiopian Airlines.
Despite state ownership, it is owned 100 per cent by government, Ethiopian Airlines is managed by seasoned aviation professionals without meddling by the government in its commercial decisions and day-to-day operations. We have strict corporate governance and prudence which are part of the elements of our success story.
What is the contribution of Ethiopian Airlines and its affiliate companies under the group to the GDP and the economy of Ethiopia as a country?
As one of the most thriving state owned enterprises, Ethiopian Airlines has been contributing to Ethiopia's economy in terms of foreign currency generation. The airline also plays a catalyzing role to the development of Ethiopia's tourism sector further contributing its share to the country's economy.
Ethiopian Airlines contributes four per cent to the GDP. Our annual revenue is about USD4.5bn. If you add other subsidiaries in the group, it is about USD5bn revenue per annum. But we are projecting it at the end of vision 2025, we want to hit the USD10bn mark.
Is there any partnership plan between Ethiopian Airlines and the Federal Government of Nigeria on the proposed Nigeria Air? And what is your advice to the Nigerian government on its quest to float a national carrier?
There is nothing on hand so far. As indicated in the past, Ethiopian is ready to provide its support and expertise for the successful establishment of the national carrier. We are ready and capable and whenever the vacancy is created, we are ready to come. Secondly, Nigeria has been a very good host. By the sheer volume of population, the most precious resource is the human resource. Nigeria, being the most populated country in Africa and the largest economy, so the mobility is very high both domestically and also oversees.
So for that, Nigeria really requires its national carrier. We wish them all the success. If we are requested for support, we are ready and willing to do that and any partnership which arises from that is most welcome.
What is the latest on your talks with the Ghanaian government on partnerships to float a national carrier for Ghana?
The project is in good progress and both parties are working closely in order to realize it as soon as possible. The initial MoU has already been signed and all other different kinds of agreements, like shareholders' agreement, management consultancy agreement, technical agreement and others, are under formulation.
Airlines have been accused recently of conniving with baggage handlers at the airport to plant illegal items (illicit drugs) on passengers' baggage. What measures have the airlines put in place to prevent this kind of untoward practices and safeguard the integrity of your operations?
We are always very serious about the security of our operations and customers and as to this specific case we have discussed with all the authorities on how the process of baggage screening should be done in a way that ensures safety is at the peak. We, together with other airlines like MS, ground handling company and the security company raised the need for scanning machines, sniffing dogs at the airport which should be arranged by the authorities. We have also placed strict control on the ground handling company and the security company as well. In short below are the check lists we are using: Sensitizing all handling staff to strictly follow the standard passenger check-in procedure; interview all passengers in regards to their bag Decision. So far, a number of African countries have signed SAATM which, once implemented, will drive down airfares by allowing carriers of signatory countries to freely access each other's airports.
SAATIM is a very good solution for Africa to put its act together to thrive. SAATM is the best thing that has ever happened to Africa because Air Traffic Connectivity is a fuel for economy, cultural exchange, people going and coming for tourism, peoples and goods and economic transactions.
As we speak 80% of African traffic is taken by non-Africans. So all of us put together we have only 20 per cent so we need to attack that 80%.
We need to eclipse, 80 per cent should be African airlines and 20 per cent should be non-African airlines. This is our continent, that is our traffic and so for more African countries to come, the traffic which is not in the hands of the African airlines is much more. So we have a lot more to play with, it's not as if we have to scramble that same 20%. No! We don't settle for that and we want to contribute more than three per cent of the global air traffic which we are doing. Now it's only three percent.
That is the reason Ethiopian Airlines is going to every African country and helping to establish regional national carriers