Friday, June 14, 2024
BusinessEthiopian anticipates becoming a USD 25 billion company

Ethiopian anticipates becoming a USD 25 billion company

As part of its fast and profitable growth strategy Ethiopian Airlines Group is planning to become a USD 25 billion company by 2035, it was learnt.

The management of Ethiopian is under preparation to unveil a new development plan dubbed Vision 2035- a revised version of Vision 2025-the 15 year growth plan launched in 2010.

In an exclusive interview with The Reporter, Ethiopian Airlines Group CEO Tewolde Gebremariam said that after achieving most of the targets set in Vision 2025 a head of schedule his management has drafted the new growth plan.

“As you know Vision 2025 is still going on but fortunately we have accomplished most of the targets we planned to accomplish in 2025-eight years a head; so there is no point of talking about Vision 2025. Because the targets are already achieved. We have discussed with our board and agreed to come up with a new strategic road map. In Ethiopian Airlines we are always expected to have a 15 year strategic plan. When we calculate it from next year it will be Vision 2035,” Tewolde said.

The management of the airline is now finalizing the new 15 year growth plan which aims at transforming the national flag carrier into a 25 billion dollars company. “In a couple of months we will unveil Vision 2035. It will be by and large scaling up our fast, profitable and sustainable growth. We will not have business model change but we will be scaling up the growth.”

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According to Tewolde, in about eight years, Ethiopian Airlines has grown by three fold. The management and employees of Ethiopian have been able to triple the size of the airline in terms of revenue, number of passengers, fleet size, number of international destination, and cargo. When the airline started implementing Vision 2025 in 2010, it was a 1.3 billion USD company. This year, the company may be closing around 4.1 billion USD. “That is more than three fold. This is exponential growth by any standard,” Tewolde said. According to the International Air Transport Association (IATA), the annual average industry growth is 5-6 percent.   

Though the figures have not yet been finalized,Tewolde disclosed that by 2035 Ethiopian plans to have more than 200 airplanes, and to generate more than 25 billion USD annual revenue. “Ethiopian Airlines is one of the fastest growing airline in the world. We will continue to be African based global airline,” he said.

In addition to its mainline business,Ethiopian has started venturing into new investments. Travel and tourism, logistics, aerospace manufacturing, and airport management are some of the new line of businesses that the airline is investing in.

Ethiopian Airlines recently inaugurated a five star hotel built at a cost of 65 million dollars at its main hub in Addis Ababa. It has embarked up on the construction of the second phase of the hotel with an out lay of 150 million USD.

“Travel and tourism is a vast industry. As we all know though Ethiopia has a lot to offer to tourists the sector remains untapped. We want to help the nation fill the vacuum,” Tewolde said. 

As a national carrier Ethiopian wants to be a catalyst in the tourism sector. Beyond transporting tourists from 120 cities,Ethiopian wants to enter the hotel and tourism business. “We might invest in the regional states if there is a vacuum where the private sector is not able to fill. We will be focusing on promoting Ethiopia as a major tourist destination all over the world through our extensive network. We will be packaging air ticket and hotel services for international tourists. We will also promote conference tourism.” By 2035,Ethiopian plans to transport more than 15 million tourists to Ethiopia.

With the view of supporting the local manufacturing sector,Ethiopian has established a joint venture cargo and logistics company with DHL, the giant global forwarding company, to provide a full-fledged cargo and logistics services in Ethiopia. The airline is also striving to develop an aerospace manufacturing industry.

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