Fana: At a Speed of Life!

Ethiopian in wake of four carriers alliance

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By Bilal Derso

Commending Ethiopian Airline’s engagement in the expansion of routes and acquisitions of stocks for better market share, experts in the field say that multiple interventions need to be put in place to win the competition to overtake the airline business among African and global carriers.

Recently, four African airlines namely Air Mauritius, South African Airways, RwandAir and Kenya Airways announced their plan to launch the first African Civil Aviation Alliance by March 2019 in the view to breaking the dominance of Ethiopian Airlines in Africa’s aviation industry.

Global Chairman of Fairfax Africa Fund, Zemedeneh Negatu says that the convergence could intensify the competition between member airlines and foreign carriers in Africa’s air transport business which is dominated by wealthy Gulf carriers such as Etihad Airways, Fly Emirates, and Qatar Airways.

Noting Ethiopian extensive destinations across Africa gives it a clear advantage against many African and other global airliners, Zemedeneh states that the airlines should engage to widen the existing routes to bolster intra-continental linkage as well as connect Africa with its extensive destinations of Europe, North and South America, Asia and the Middle East.

He says that Ethiopian should also give utmost priority to the purchase of ultra-modern aircrafts and implement world class air transport services to widen its stake in Africa’s aviation business in which Gulf affluent airlines have been controlled 80 percent of the market.

According to Zemedeneh, upholding the acquisition of shares in various African airways and creating sub-regional hubs would also have paramount importance to enhance the competition against global carriers and remain among the leading players in the volatile industry. Recently, the Ethiopian flag carrier secured each 49 percent of share in Malawi and Chad airlines and seized 45 and 27 percent of stake in Zambia and Togo carriers.

Furthermore, Ethiopian has a plan to secure 49 percent share in Guinea Airways and fully owned the Mozambique Airlines. The Ethiopian Airlines needs to extend the critical role it has been playing in connecting the diplomatic capital of Africa with rest of the continent, he says, adding that enabling people could flight any time to any part of the continent has a key role to remain competitive in Africa’s aviation business.

By the same token, Assistant Professor of Economics at Dilla University Dr. Dawit Ayesew says that priority should be given to capitalize the Ethiopian Cargo, the largest network cargo operator in Africa, to foster intra-continental trade and connect Africa with global markets.

Dr. Dawit notes that expanding the existing one million annual uplift capacity of the cargo would have a paramount importance in supporting African countries export and investment undertakings and international trade performance. Stating many African countries are deprived of such world-class facilities, the expert notes that Ethiopian Cargo is offering Africans modern and dependable services at lower cost as the level of interest of non-African carriers in African cargo is largely unsatisfactory.

As the largest cargo operator in Africa, Ethiopian Cargo and Logistics Services operate eight dedicated freighters to 44 global freighter destinations in Africa, the Middle East, Asia, the Americas and Europe, augmenting the export of perishable farm products from Africa and the import of high value industrial goods.

According to an economist and business consultant, Dr. Fikru Deksisa the government has the lion’s share in making the flag carrier Africa’s best airline through giving a priority for the expansion of air transport in both the first and second five-year development plans and making the sector an essential part of the national socio-economic development goals.

Dr. Fikru states that the government has also been putting in place viable legal and polices frameworks to supplement the execution of Ethiopian short and long-term strategies thereby making the air transport stimulate the country’s economic growth and efforts towards poverty eradication. He says that the government’s smart intervention is crucial to increase the capital of Ethiopian Airlines so that it could meet the stiff competition in the industry.

The support would also be helpful to extend the successful journey of Ethiopian in connecting Africa to the rest of the world including its indispensable role in accelerating the realization of Agenda 2063. Noting the government has an exemplary role in air transport modernization through massive investment in building Africa’s largest civil aviation academy and other facilities, the economist calls on the incumbent to extend efforts in making the sector as the driving force of Ethiopia’s economic growth.

The experts express conviction that Ethiopian developing and executing of its long-term strategies in most effective and efficient manner is a key component to remain competitive in the volatile aviation industry. To this end, the airliner should extend its engagement in building the capacity of pilots, technicians and cabin crew as well as keeping acquisitions of new aircrafts and investments on modern air transport facilities and logistics.

The expansion of Bole International Airport would only have short-term effect in enhancing the airport’s passenger traffic, the experts say, adding that the commencement of new airport with up to 75-80 million annual passengers handling capacity is the order of the day so that Ethiopian could stay as Africa’s best airline.