Ethiopian African CEO of the Year warns of challenges ahead
November 22, 2012: The Chief Executive of Ethiopian Airline, Tewolde Gebremariam, has proved that state-owned airline can be profitable even during difficult time. Gebremariam, who was awarded the African CEO of the Year at the Africa CEO Forum, held in Geneva, said that consolidation among African carriers is vital in order to face competition from increasing competition from Chinese airline. The competitors, he said have now set their sights on Africa.
“Consolidation will come, because small African carriers will find it very difficult to survive the competition,” he said.
Tewolde Gebremariam emphasized on the fact that more needs to be done from African governments as well as the African Union to support African carriers, who only make 20% for the airline traffic over the continent. He says that the airline traffic from African carriers has to be at least 50%.
According to him a number of factors have helped Ethiopian Airline to be profitable: cost management, efficient aircraft utilization and a good route network. Gebremariam also pointed out that good corporate governance and no government interference, which owns 100% of the company, were crucial in the airline’s success.
During its last fiscal year, 2011-12, Ethiopian Airline registered an operating profit of $55 million and a net profit of $40 million.
Facing a reduced demand, caused by the Eurozone crisis, Ethiopian Airline flew 25% more passengers than the previous year, and the airline is growing according to the 15-year development plan.
The African CEO of the Year spoke about the stellar growth of Ethiopian Airline, which has increased its fleet to 55 aircrafts in 8 years. Ethiopian Airline flies to 43 African countries and has a growing international network, which includes 28 weekly flights to China.
It was the first African carrier, and second in the world, to start flying the new Boeing 787 Dreamliner this year, and now plans to buy more planes outright.
Gebremariam said that while the company now owns 50% of its planes and leases the other 50%, its goal is to own 60% within the next few years.
Ethiopian Airlines, the fastest growing airline in Africa, made its maiden international flight to Cairo in 1946 and now the Airline provides dependable services to 70 international destinations spanning four continents.
Ethiopian is proud to be a Star Alliance Member. The Star Alliance network is the leading global airline network offering customers convenient worldwide reach and a smoother travel experience. The Star Alliance network offers more than 21,555 daily flights to 1,356 airports in 193 countries.
Ethiopian is a multi-award winner for its commitment and contributions towards the development and growth of the African aviation industry and in recognition of its distinguished long-haul operations enhanced by the introduction of new routes and products. Recently, Ethiopian won Gold in the African Airline of the Year 2011/2012 Awards organized by the African Aviation News Portal. Ethiopian also received the 2011 AFRAA award for being consistently profitable over the years and has won the “AFRICAN CARGO AIRLINE OF THE YEAR 2011 Award” for its excellence in air cargo. Ethiopian also won the 2012 “African Airline of the Year Award” from Air Transport Quarterly Magazine.
With its acquisition of and firm orders for several new modern fleet, the airline is well positioned to pursue aggressively the implementation of its Vision 2025 strategic plan to become the leading aviation group in Africa.