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German carrier expanding in Ethiopia

German carrier expanding in Ethiopia

Carsten Spohr, the Chairman of the Executive Board of Lufthansa, was in Addis Ababa a month ago, meeting the local management of the company, highlight the importance of Ethiopia as it attempts to expand its African routes and meet with customers, as it marks its 50th anniversary of serving the Ethiopian market. Here, he reflects with Samuel Getachew of The Reporters on the importance of aviation to Ethiopia, on re-starting a daily flight to Frankfurt from Addis Ababa, on its corporate responsibility mantra and on how to take the partnership between Europe and Africa to new height when it comes to aviation.

The Reporter: Lufthansa has been in Ethiopia for many years. You are now back in full force, with a daily non-stop flight to Frankfurt. Tell me some of the highlights of your operation in Ethiopia?

Carsten Spohr: First of all, we are few weeks away from our 50th anniversary in Ethiopia. Remember, we came to Ethiopia in 1969. I am sure you know the fact that Lufthansa did notexist until the end of World War II in 1955. Ethiopia was added to the map in 1969. We have also had a route to Germany via Jeddah but, we added the non-stop flight recently and we are excited. Last year, we had lots of passengers to transport. Some would say, that is a wonderful problem to have for an airline. Regarding the flight to Addis Ababa that was basically an operational issue.

As you said, Lufthansa has had long years of association with Ethiopia, perhaps one of the very few European airlines that has had a regular route to the country. When people look at Lufthansa in Ethiopia, your logo and brand name, how do you want them to envision your airline to be?

We are known as Deutsche Lufthansa in the world. I want people to look at Lufthansa as an international, reputable airline that is a premium airline, with premium staff and premium service. That is how we are known throughout the world. Our staff members like to work for us and they show it regularly. German, in all modesty, is known for reliable labiality and technical perfectibility, with the exception of our airport in Berlin (laughs); but that is how we want to be known and are known within Africa. We have increased our services to and from Africa by 15 percent.

We are the only ones that offer Premium Economy class and it is always sold-out and we are bringing lager air crafts and opening more seats. We have not always been interested in serving Africa, like our European peers, but Lufthansa is catching up with that. We are a company that has a long-term and sustainable strategy; so yes, we see the growth and the dynamic nature of Africa and we want to be part of that success story of the continent.

Share with me the issues that have plagued your airline for many years, with the suspension of services linked to endless strikes that has, I am sure, been concerning for the airline.

Nobody is happier than me, as that issue is now in our past. We went through a process and had to restructure our company and that forced us to cut our operational costs in order to stay competitive and offer competitive prices to our passengers. We had not done that in the past and we had to act. You also have to remember, in Germany, we have powerful unions and a society where we almost have a population with zero unemployment and full employment, something that is almost a dream for most African countries. Again, sustainability is important to us at Lufthansa. I am happy to report those unrests are history now and our customers can continue to rely on our services. Also, in reflection, I can only apologize for what has occurred in the past and take to heart that some of our customers were affected by it.

I have to ask you, when customers buy Lufthansa plane tickets, they anticipate being on a Lufthansa plane.  That is not always the case. I, for instance, had bought Lufthansa tickets in the past but ended up being flown on Ethiopian airlines from Frankfurt. Why is that?

First answer, aviation needs partnerships. As the world’s largest aviation group, we also need partners to function properly. You have to know, even us, as big as we are; we only have a market share of 3.5 percent of passenger traffic. You need that partnership in aviation, unlike let’s say, global banks. Our customers understand that aspect of the business. We share the information on the tickets issued and the boarding passes given to our customers. It always says, “Operated by”, as courtesy information to them. That is why Star Alliance was created, allowing us to complement our strengths with one another. We mentored Ethiopian airlines to join Star Alliance. Ethiopian Airlines is the leading airline in Africa. We are the leading airline in Europe. What better partnership can there ever be?

Africa is a fast growing society, with a growing middle class and spending power. Yet, it is still a society with a slew of challenges, including lack of infrastructure. When you have conversations with board members of Lufthansa about expanding and making an investment in Africa, what reactions do you usually receive?

You know one job our Board Members always look and see is where we can earn a profit. They are easy to deal with and often ask question on how we can earn money and whether something complements our strategy. As long as we present to them a good strategy on how we can make money in Africa or elsewhere, they are usually listen. Om general, we are likely to invest in initiatives that help us earn a profit in Africa, as we did in South Africa with our Cargo and in catering services.

With catering, we are also looking at possibly investing in Addis Ababa. I am very much convinced on the role of aviation to connect the world to each other and make the world a better place. Aviation plays a huge role for globalization and making this world a smaller place to each other. Where else could you see the infrastructure upside of aviation; but in Africa where ground infrastructure sometimes does not exist? If we are to be a global company, Africa is a model society to have us play a larger role. And that is not just in terms of transporting people but practicing our corporate responsibility mantra.

You are the CEO of such a powerful and large international company. What does your personal visit to Ethiopia signify?

Being a global company, we need to focus more on Africa. I am not just here to visit my management team in Ethiopia, but I find it important that I personally come and visit countries that we operate in. Africa is the most dynamic place in the world with fast growing populations. We understand the shortcomings of the continent but see big potential. We know there lack of infrastructures shortages, airports, the shortage of traffic controllers. But I think we need to work closely between Europe and Africa to overcome all these challenges as they have safety impacts. Lufthansa has an interest to play a role, so does the European Union. This is my third visit in Africa in the last three months. I expect the frequency of my visit to go up, not down.

Lufthansa is known for its famous corporate mantra. Tell me about some of the local projects you support?

We play a large role in heath alliance and we currently operate two large projects in Ethiopia. We are very proud of it. We are focused on women training in hotel management and sectorial work and also we help and assist young people with school projects from kindergarten onward. Our work is not just in transportation but also to be a corporate company that helps contribute in the world. We like to contribute, our staff members like to it, in Ethiopia and elsewhere, and we tremendously enjoy doing it as a company and many people benefit from our efforts. So, it’s a win-win scenario for us all.