Tuesday, May 21, 2024
InterviewEthiopian Airlines: Leading by merit, the magic bullet to thrive in Aviation...

Ethiopian Airlines: Leading by merit, the magic bullet to thrive in Aviation Industry

Mesfin Tassew, former head of Asky Airlines, became Ethiopian Airlines Chief Executive Officer on March 2022, following the departure of Tewolde Gebremariam after 11 years of service. Having begun his career with Ethiopian in 1984 as an Associate Engineer, he progressed through the company’s ranks to hold managerial and supervisory positions in the engineering and aircraft maintenance departments. He eventually rose to the position of vice president before taking the CEO position at Asky Airlines, a company in which Ethiopian holds a 49 percent stake. Currently, he is in charge of the ET’s ambitious but achievable vision 2035, which aspires to have 67 million passengers use its service. He intends to continue following the predecessors’ management tenet of leading by merit. Selamawit Mengesha and Ashenafi Endale of The Reporter sat down with him to discuss the current state of the Airlines and what lies ahead.

Mesfin Tassew Ethiopian Airlines

The Reporter: Ethiopian airlines have stepped up performance during the COVID-19 pandemic by fast-shifting to cargo services. Is the passenger service returning to pre-COVID-19 levels? How much was the revenue of Ethiopian Airlines from the cargo and passenger service businesses this year?

When COVID-19 became a global pandemic two and a half years ago, all airlines around the world were severely affected. Passenger service was almost totally halted because countries had closed their borders and mobility was stopped. As a result, the last two and a half years have been extremely difficult for all airlines.

But Ethiopian Airlines passed this tough time with good performance because it immediately shifted from passenger service to cargo. Many airlines and operators in the aviation industry have been downsizing employees and facing capital shortage problems. But Ethiopian airlines have been profiting during the pandemic every year.

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Passenger service appetite has returned since last year, following the controls on COVID-19 spread. As a result, both our passenger and cargo service performance is improving. Ethiopian Airlines’ budget year starts on July 1 and ends on September 30. This year (2021/22), we will have served 8.7 million passengers. This is 72 percent of the pre-COVID-19 performance, which means in 2019. Passenger service is significantly growing.

On the other hand, the cargo service is showing more of a declining trend. In 2021/22, we generated USD five billion in revenue, mainly because we worked hard on cargo service. We will know the exact profit once the audit is finalized. But our evaluation indicates we have a very good profit.

The passenger service is growing fast. Even since last July, the last three months (July, August, and September) are almost catching up with pre-covid19. In 2019, we transported 12.1 million people. We plan to transport 12.7 million people this year (2022/23). Our three-month performance indicates we are on track.

After two years, the global aviation industry is expected to regain its pre-COVID-19 performance, but Ethiopian Airlines is achieving it ahead of the forecasted time.

How much is the net profit for 2021/22?

An audit is already underway. We will disclose in a month’s time.

You mentioned passenger service is taking off as COVID-19 is drifting away. But you stated that cargo service is declining. Is this related to the external factors you mentioned, like the Ukraine war?

The declining cargo service is attributable to many factors. Cargo surged during COVID-19 because the supply of personal protective equipment surged. Huge amounts of COVID-19 equipment, vaccine, and testing kits were produced in China and disseminated to the rest of the world. This has overwhelmed global cargo traffic during the pandemic. But this has declined now.

The second factor is that the global economy is back-pedaling following the Ukraine-Russia war.

In 2021, the global economy grew by 5.6 percent. By 2022, this is expected to fall to 3.2 percent. The assumption is that it will drop in 2023 too. When the global economy contracted, manufacturing and trade also shrank. So the global demand for air cargo transport also shrinks. The main reason for the cargo drop is the global economic contraction. When covdi19 first came, only Wuhan province was closed down and the rest of the provinces in China were actively working. But now, the whole country is closed. So manufacturing activities was at standstill in China. A trade war is also on the cards now between China and America. So these factors are weakening the cargo business.

How do you evaluate the competition with other airlines like Emirates, Qatar Airways, Etihad, and others, since they are also aggressively expanding into the African market?

Many airlines are currently speeding up their flight frequencies, which they have reduced since COVID-19. Fly Emirates has slashed its flight numbers substantially. Now they are increasing it. Etihad and Turkish airlines are also doing the same. But they are far from reaching pre-covid19 performance. Qatar is undertaking an aggressive expansion. They even reached an agreement to acquire 49 percent of Rwanda’s air. They will use Rwanda Air as a partner. So, while other airlines are struggling to attain their pre-covid19 status, Qatar is aggressively working to expand to the African market. Competition is our mark and what we always do. So we are working to win the competition successfully.

Ethiopian Airlines is also embarking on acquiring stakes mainly in African airlines and turning around weak airlines into successful aviators. What is the progress regarding the new acquisitions?

Africa is our main market. To better serve this market, our base in Addis Ababa alone is not sufficient. Cooperation and coordination with other African airlines is the best way to remain close to the market. Having a presence in African countries helps us to remain close to the passengers. We have outlined this strategy in our fifteen-year roadmap of Vision 2025. So we are creating partner airlines in different African countries, using different arrangements.

Our first partner was ASKY Airlines, in Lome, Togo. We re-established ASKY as a commercial private aviation company. We are shareholders, along with banks. The management is under Ethiopian Airlines. It has been twelve years since we took over the Airlines. Currently, ASKY is the biggest airline in West Africa. It is flying to 24 countries. Its number of aircraft also surged. It has been registering a good profit in the past two years, even during COVID-19. So it is a successful partnership.

In southern Africa too, we acquired a 49 percent share in Lilongwe, Malawi’s airline. ET also has management. It has been profiting since last year. Recently, we have also set up an airline in Zambia, in collaboration with the Zambian government. This airline is just taking off. We are currently undertaking two different partnerships in the DRC, Kinshasa, and Nigeria. We have reached an agreement to have 49 percent, while the majority share is held by the DRC government. We have signed a shareholder agreement and other agreements too. But it has not started so far. Lately, there is a delay from the DRC government side. We believe they delayed because they had to sort out certain internal issues.

Nigeria also wants to set up a national career. They invited many international airlines and finally selected Ethiopian Airlines as their partner. The Nigerian market is huge; the Nigerian economy and population are huge. There are many private aviators there, but they are not providing sufficient service. So the Nigerian government wants a good aviation company in which the Nigerian government has a stake. Currently, we are in final negotiations with the Nigerian government. There are a lot of preparations underway. Ethiopian Airlines will own 49 percent of Nigeria’s national carrier, in addition to the management contract. As per the Nigerian government’s plan and effort, we will establish the airline by the end of December and gradually scale it up bit by bit. They asked us this and we are working in this plan.

Did the DRC government bring up new terms after the agreement was signed? Why is it delayed?

We do not know the actual reason. There is Congo airways. It is state airline. But our agreement is to establish the air Congo. So we believe that DRC government delayed to determine the fate of Congo airway, before embarking with us on air Congo.

Is it possible that Ethiopian Airlines will start flying on both air Congo and Congo airways?

There will be no such probability. Congo Airways was not successful, and it did not grow. It is not in a favorable environment that can enable it to grow. That is why the DRC government sought to establish another airline with us. Airline business is not simple task. It requires monumental management discipline. It must be highly efficient and cost-effective. We do not think Congo Airways fulfills these ingredients. Ethiopian Airlines invests in foreign airlines only when they have the potential to grow and become profitable. Otherwise, we do not take equity in airlines that cannot grow. Under the current status of Congo airways, Ethiopian Airlines is not willing to have a stake.

Are there new external acquisitions in the pipeline, apart from Congo and Nigeria?

Our targets at this moment are the DRC and Nigeria. We have no ripe partnership negotiations at the moment. But we always keep our eyes wide open for opportunities. We are ready to jump whenever the opportunity happens. But for now, succeeding in DRC and Nigeria is a very big achievement. We focus on them.

What is the return and profit of foreign airlines in which ET has taken stakes so far? Is ET management over-stretching since its capacity is to cover the group in Addis and also other airlines outside Ethiopia? Is there management pressure on the group?

We designed ASKY as a replica of Ethiopian Airlines. Ethiopian Airlines has been profitable for years. This is because it operates as a commercial entity, cost effectively, with leadership integrity, autonomous decision making, a prudent work culture and many other principles. ASKY is established on these principles. We have no doubt ASKY will grow robustly and become a top-profiting airline.

The Malawi airline is also in the same pattern, but it is facing certain market limitations because of its geographic location. Yet it has many prospects. Most African airlines, including Congo and Nigeria, succumbed to problems because they lacked pure working principles. They lack vision, leadership, capacity, and other limitations.

Our expansion abroad has put certain pressure on the group’s management. But whenever we establish a new airline in partnership, we always request that the management should be under Ethiopian Airlines. So we sent the executive management from Addis. This, to some extent, is depleting our executive management manpower at the group in Addis. But since going abroad is our strategy, we have to fill that gap.

More than the share dividend we earn from our partnership airlines, our revenue from the market network is very large. Our international partners provide us with a significant number of cargo and passenger markets. We are also feeding them in turn. Since this strategy is expanding our market share and also revenue, we will continue acquiring stakes abroad.

Recently, the aviation authority introduced a new aviation policy, which gave more room for local private aviation companies. Will this policy shrink Ethiopian Airlines’ share in the domestic aviation market?

The policy is very good and we support the objectives. It enables other aviation operators to expand. Ethiopia has a large population. Once the economy grows, many more aviators will be needed. There are 22 asphalt airport facilities in Ethiopia. Currently, we are planning to finalize the development of five more airports in the coming two years. So it will reach 27. This is big for a country in Africa.

Currently, Ethiopian Airlines has deployed 32 aircraft (Q400) for the domestic service. If other airlines join the domestic market in Ethiopia, it will have a good impact. Of course, they will have a certain portion of our market. But since the market will grow, we all have fare.

Ethiopian Airlines’ biggest target is the international market. We consider domestic service a national duty. Usually, the domestic market generates a loss, not a profit. It fetches a profit only sometimes. So we have no opposition if other airlines come to service the domestic aviation market. We do not see them as a threat. We are ready to support them. If domestic aviation grows, the economy grows.

Where will the new five airports be built? Does it include the Debrezeit grand airport that was planned before?

The five domestic airports include Debre Markos, Negele Borena, and Metu/Gore. The rest are in the southern part of Ethiopia. The new airport planned for near Addis Ababa is not included in the five. It is an exceptionally huge airport. It is planned to be established near Bishoftu (Debrezeit). It has not started yet. The cost is very high. It will be financed by a large external loan. The location has been identified but we have not received the land yet.

How is ET preparing to exploit the African single market under the AfCFTA?

The goal of the Single African Air Transport Market (SATM) is to allow African airlines to serve Africa freely, not free of charge, but freely. It is the AU’s program that will most benefit African aviators. Aviation activates trade, tourism, conferences, and other socio-economic activities of countries.

But many countries limit flight rights to their skies. Some countries deny us flight rights when we ask them. Those countries that have their own carriers limit us to protecting the market for their own carriers. Those who have no national carriers also restrict us, without a reason.

SATM aims at removing such blockades and boosting African economic growth. That is why the AU is pushing for this program. The AfCFTA aims at not only creating a single aviation market but also removing the aviation tax barriers. SATM will accelerate the cargo, passenger service, apart from creating vibrant economic activity in Africa. SATM and AfCFTA are complementary. Ethiopian Airlines makes every effort to put both initiatives into action. These initiatives must be enacted as soon as possible if Africa is to grow.

If SATM gives preferential treatment to African airlines, airlines from other continents will be at a disadvantage. What if other continents introduce reciprocal preferential treatments for their airlines, which will affect African airlines’ operations outside Africa?

Currently, non-African airlines control 80 percent of the African aviation market. Air France, British Airways, Lufthansa, Turkish, Etihad, Emirates, Qatar, and other European, Middle East, and American airlines are controlling the African market. For instance, American airlines have started coming to the West African market, including United and Delta. But no airline from West Africa is going to America. African airlines in general have no share in serving the global aviation industry. Even in the African aviation market, African airlines’ share is less than 20 percent. Even this share is shrinking now. Before, South African airlines, Kenyan Airways, and other African carriers had significant shares, which have been dropping. Only Ethiopian airlines have significant activity in sub-Saharan and global markets. Even if we have to negotiate with airlines from other continents, SATM will provide African airlines with leverage and a platform.  If SATM is enacted, it will be huge benefit for African airlines to cooperate and grow together. Even if we have to negotiate with airlines from other continents, SATM will provide African airlines with leverage and a platform. So it will have no negative impact on us.

How much the market share of Ethiopian airlines in the sub-Saharan Africa?

The largest pie of the sub-Saharan Africa market is held by non-African airlines. But among African airlines, ET is dominant. I do not have the exact figure.

ET is now one of the 27 SOEs reshuffled from PEHA to EIH. What are the changes in regulations since then? What are the opportunities EIH is creating for ET?

Ethiopian Airlines was accountable for PEHA. At some point, this was shifted to the Ministry of Finance. We have a relationship with PEHA, but our accountability is mainly to MoF. But since last June, our regulatory administration has been placed under EIH. At any time, Ethiopian Airlines operates autonomously, by itself. We abide by government regulations. The government is the major shareholder of Ethiopian Airlines. We uphold all the laws of the land. But regarding the operation, we abide by principles that enable us to compete in the international aviation industry. Of course, whenever we want certain support from the government, we request and get it.

The reshuffle of Ethiopian Airlines to EIH has had no negative impact on us. EIH is established to support the leading SOEs. Its support includes strategic support, investments, and coordination among the SOEs. If the SOEs need external financing, EIH supports them. EIH also creates new industries. So far, we have not embarked on such an initiative. We are looking forward to working together on projects and strategies that will support Ethiopian Airlines. Our core business remains the air transport industry. Annual plans, quarterly performance reports, and other statements were used to be sent to MoF. Now we directly send these reports to EIH. There is nothing new.

What kind of opportunity and prospects does EIH bring?

It has been only a few months since we were put under EIH. Except exchanging information, we have not embarked on tangible projects with EIH so far. EIH’s objective is to create opportunities. It will study and identify in which areas we can make the most-returning investments. It also facilitates horizontal cross-investments among the SOEs.

We heard ET requested EIH to raise its capital. How much is the new paid-up capital?

Regarding paid-up capital, we requested the government to raise it to 300 billion birr, from 100 billion now. We are awaiting government approval. A proportionate debt to equity ratio is essential in a bid for us to get loans. For instance, we are purchasing new aircraft, and when we do so, our loan portfolio increases. Because the aircraft are purchased with credit, it increases our loan stock. Hence, our “debt to equity’ ratio must be in a sound and acceptable range. If our debt stock becomes more than our capital, it is distorted. Even if we have the capital, it is wrong to operate with less paid up capital. Our creditors can also not provide finance for us. So, unless the authorized capital is increased, we cannot have the right financial flow. Currently, we are importing new aircraft. This will be added to our debt. So our debt to equity ratio must be sound.

Regarding the paid-up capital raise, the EIH board was expected to make the decision last week.

So far, we have not heard any decisions. We are awaiting the approval.

Does Ethiopian Airlines surrender the foreign currency it generates to the central bank?

Our expenses are incurred abroad. So we keep most of the forex we generate abroad. This is to enable efficient financial flow. Giving the foreign currency we generate to NBE and then asking NBE to give us the foreign currency does not make sense. Such a system is also lengthy and does not have any operational advantage. So we keep our forex in foreign banks. We do so for better transactional efficiency. If one of our aircraft needs immediate maintenance in another country, we immediately order a new spare part and do the maintenance.

We immediately effected the payment from our computers in Addis Ababa. Then the payment is made from our accounts abroad. If I order a spare part from London today, it will reach Addis Ababa tomorrow morning. Most of the international spare parts suppliers request prepayment. So we transfer the money electronically from our foreign bank accounts.

To maintain such efficiency, most of Ethiopian Airlines’ money is kept abroad. But for our domestic operations, we usually need birr. But most of our money is in hard currency. So whenever we want birr, we give our hard currency to NBE, and take the exchange in birr. Then we use the birr for our domestic activities. This is the practice we widely use. This way, we are generating a substantial amount of foreign currency for the country. Since recently, we have started bringing our hard currency abroad and keeping it in our separate local hard currency account.


Did Ethiopian Airlines resume flights to Moscow, Beijing?

We used to fly to Moscow but have stopped since COVID-19. We resumed flying to Moscow now. We have been flying to Beijing for half a century. It was halted due to COVID-19. But lately they have allowed us a few flights per week. We are flying to five destinations in China. But they allow us a maximum of two flights per week for passenger service. Before COVID-19, we used to make over 30 passenger flights to China weekly. We hope we can resume this once COVID-19 fully goes away. We plan to pass even at the pre-COVID-19 frequency. We are also studying new destinations. In June, we started flying to China, our new destination in India. Recently, we also started flying to Oman, Jordan. Next week, we will start flying to new destinations in Zimbabwe and Switzerland. This trend continues.

When will the new headquarters building commence? What does it cost?

The headquarters is just starting. The design was already done. But currently it is under revision because the initial design was done years ago. Once the design revision is finalized, we will float the bid to pick the contractor. The construction cost is not known yet. Many projects are currently underway, including the construction of two maintenance hangars. We are also embarking on the construction of a huge warehouse. Construction of a new runway is also underway. Expansion of the existing terminal is also underway. We also plan to construct a new terminal outside Addis Ababa. This is apart from the five new airports mentioned. Expanding more infrastructure continues. This has nothing to do with the paid-up capital increase request.

How many new aircraft are you planning to buy?

Currently, we have 139 aircraft actively working. Additionally, 36 new aircraft have been ordered and are in the pipeline. They will arrive in the next three to four years. We inked the procurement agreement. Their arrival is starting now. One of the 36 ordered aircraft arrives before the end of October. Three will arrive in November, one from Airbus and two from Boeing. On the other hand, we will discharge old aircraft. But the net impact is that our number of aircraft continues to grow. By 2035, the number of our aircraft will reach 271.

What are the types of 36 aircraft already ordered?

Of the 36 ordered, 22 are Boeing 737 MAX. These are the latest technologies. All three are Boeing 7A7. These are also the latest technologies in wide-body aircraft. Six more are Airbus A350s. The other five are Boeing 777 new cargo aircraft. Additionally, we are undertaking studies to acquire new cargo aircraft. We will also buy medium jets for domestic and neighboring countries’ services. Evaluation is already underway before ordering the jets. I cannot disclose the costs. Some are confidential.

You mentioned the 22 new aircraft ordered are Boeing MAX products. Are they the same as the ones that were found defective?

The Boeing 737 MAX is the one that has sustained an accident twice. Unfortunately, the one accident happened in Ethiopia. A high-level investigation was conducted and identified the source of the problem as the design defect of the aircraft. Boeing has corrected that design defect infallibly. So the aircraft is currently safe, reliable, and flying across the world. It is a very efficient airplane.

Normally, Ethiopian airlines take on external debts on their own. But arguments go on about whether these debts are owed to the central government or not. The central government is opting for external debt restructuring, under IMF and G20 auspices. Is the central government’s situation affecting Ethiopian Airlines’ access to external debt? Do you have such room now that the central government does not have?

I have no exact grasp of the discussion between the IMF and the Ethiopian government. Ethiopian Airlines takes loans to buy aircraft and also develop infrastructure. Most of these loans are external loans. Aircraft purchasing finance is a totally external loan. Such financing is usually big and local banks have no capacity to provide it.

Whenever we go for an external loan, the foreign lenders ask for a guarantee. Before Ethiopian Airports Enterprise is blended to the group, the enterprise used to take external loans to develop infrastructure. The Ethiopian government used to guarantee the enterprise’s external loans. Hence, the enterprise’s loan becomes the country’s debt. This is because the enterprise generates revenues in birr, while its debt is paid in foreign currency. So the central government pays the debt from NBE or from government forex coffers.

But when it comes to Ethiopian Airlines, it is the reverse. We never ask for a government guarantee to take external loans. Once the aircraft is selected and the negotiation is done and approved by the board, we directly make the purchase. We directly sign an agreement with the creditor and proceed to the purchase. So this is not government debt. There is no government guarantee on our debts. When we buy aircraft with external loans, the aircraft itself is a guarantee. We provide our own guarantee for credits for infrastructure facilities.

Ethiopian Airlines does not request NBE or the government to allocate forex to pay our debts. Ethiopian Airlines generates revenue in foreign currency, so we can directly pay our external debts from our own forex account. We are not indebted to the Ethiopian government. Though Ethiopian Airlines is state-owned, its operation is like those of a private commercial firm. It takes and pays loans as a private firm. It should not be linked to the government’s loans at the level of the IMF.

Creditors include “country risk’ whenever they give a loan. But that does not affect us. If I say Ethiopian Airlines wants to buy an aircraft today, at least 30 international banks will immediately come up with the loan. They have a strong trust in Ethiopian Airlines “credit worthiness.” We have never failed to service our debt, or even delayed it by days. We can get loans easily.

Some experts argue that Ethiopian Airlines seems profitable at first because it does not pay tax. And secondly, it stopped withholding future maintenance costs and stopped putting aside the money. This maintenance cost is being considered as profit. What is your reflection on this?

For many years, there was an “accrual” in our financial statements. This is money put aside as an expense for the maintenance cost of aircraft in the next one or two years. We know which aircraft need maintenance when. So maintenance costs are withheld. That money is registered as an expense, already as a plan.

But such a system has lost relevance in the modern financial statement system. Nowadays, our financial system strictly adheres to IFRS. This system does not allow withholding money for future maintenance expenses. Our creditors do not accept the old “accrual” system for our financial statements. Auditors also do not approve.

Regarding profit tax, it is wrong to conclude that Ethiopian Airlines is profitable because it does not pay profit tax. Basically, tax is paid when there is a profit. So we are profiting.

Ethiopian Airlines is exempted from tax by its establishment proclamation. This is required because the aviation industry, by nature, is a highly competitive sector. Many African airlines ask the government for money to buy aircraft. But Ethiopian Airlines uses its own money. It is also allowed to re-invest its profits. So we use the money to expand infrastructure and purchase aircraft. So it is by government decision that we reinvest our profits. This helped us grow faster.

Ethiopian Airlines’ independence from domestic politics served as a second pillar in its ability to withstand regime changes. However, there were some allegations on social media that the airline employment process favors a select number of ethnic groups in the nation. If there are such issues, how is your management reversing these problems and establishing a fair and impartial hiring process?

One of the pillars of Ethiopian Airlines’ success is its entitlement to operate autonomously and independently. Recruitment is conducted based on merit alone. We have no preference for any ethnic group, religion, or gender. Only ability is prioritized, to be recruited, promoted or get incentive benefits. This culture has been maintained since the establishment of the airline. This fundamental principle was laid down by the Americans when they first established the airline. When Ethiopians overtook the airlines from the Americans, they maintained the principle. We always have written policies and procedures. This culture continues.

In the past few years, some rumors have emerged. These rumors indicate there is a trend of activities other than the well-established work culture and ethics. So far, we have not gone back and investigated what really happened. The responsibility of my current management is to make sure the whole system of the airline is based on only merit. Every employee has to feel a sense of ownership and believe that they are yielding their talent. So we are working to put a transparent and clear system in place.

What are the major targets of Vision 2035?

The ultimate objective of Vision 2035 is to maintain the enterprise’s rapid growth and continue profiting. This is the core principle of the airline and will never change. This has been our guiding principle for the past seventeen years. Fast growth, profit, and sustainability are the core principles that never change. Unless we keep growing, we will be out of the competition.

By 2035, we plan to fly to 209 destinations. We will have 271 modern aircraft. We will transport 67 million passengers annually by 2035. We will be carrying 3 million tons of cargo annually. The company’s annual revenue will reach USD 25 billion. Several strategies have been devised to achieve these targets. Every detail is stated in the strategic document.

We also plan to diversify our services, from cargo and passengers to other related aviation services. Maintenance, training, in-flight catering services, and many other business lines will generate revenues.

The other plan is the multi-hub strategy. We will have hubs in a number of African countries, apart from Addis Ababa. All the hubs abroad will be designed in the style of Addis Ababa. Regional hubs will help us penetrate regional markets.

There are five pillars that support the strategies. These pillars will take all our effort. The first is manpower. The second is infrastructure. Many airlines do not spend on infrastructure. I do not think there is any airline that invests in infrastructure as much as Ethiopian Airlines does. The third pillar is always having the latest and most modern aircraft in our fleets. They have to be fuel-saving, environmentally friendly, comfortable for clients, and cost-effective. The fourth pillar is, at any time, developing  modern and efficient working system. We have to continuously evaluate and improve our policies and procedures. Technology is the decisive element here. From back office to customer service, everything must be supported with digital technology. The fifth pillar is sustainability. Ethiopian Airlines will work on social responsibility and environmental crisis mitigation, which is becoming a global concern. We will adopt energy sources that reduce carbon emissions. So Vision 2035 is based on these anchors.

What is your management philosophy?

I grew up working for Ethiopian Airlines. When Vision 2010, 2025, and 2035 were developed, I was part of it. Except for maintaining the core principles and working culture of the airlines, I will not introduce fundamental change in the management philosophy. I have no plan for a drastic change in the management philosophy. The only management belief I have is, the external environment is always in a state of changing dynamism. I cannot control the external environment. You do not know what will happen tomorrow. For instance, the COVID-19 pandemic is drifting away currently. But it can infiltrate the world tomorrow. COVID-19 can die completely, but Ebola might infect the African continent. Or the world could go into another recession because of the Ukraine and Russia war or China and America’s tension.

In the face of any external turbulence, you can survive only if you have internal strength.  So the Ethiopian airlines have to work more on internal strength. External factors can be maneuvered only by internal strength. That means having highly professional, ethical, and hardworking employees who care about the airlines. We have to continuously generate such manpower. This is a survival issue for the airline. If we have employees with creative minds, the enterprise will know how to survive any crisis. Capacity building is another focus area. We do not have to send our staff abroad to learn. We have to teach the leadership and employees here.

The purpose of our investments in infrastructure is to enable local capacity building and also provide the finest service for clients. If we provide the finest services, we will have loyal customers. Even if we have defects, loyal customers do not take it as the norm, but as an exception.

Last word?

Ethiopian Airlines is on the right track currently. The passenger service operation is very good. The cargo operation was also good, though it did not reach where we expected. Our employees and staff are back to normal. There were so many unnecessary rumors buzzing around. Now the dust has settled, and everybody is back to normal work.

The competition from other airlines is also back, which diminished during the pandemic. There were even airlines that completely closed due to COVID-19. Now they are coming back to the market. Some are even cutting prices to break into the market. We are working on our internal strengths. Though we do not know the future, indisputably we will survive any crisis, and carry forward the airline, under any circumstances. We keep working hard and will multiply the overall contribution of the airlines to Ethiopia.

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