In June 2023, Ethiopian Airlines’ CEO, Mesfin Tasew, shared exciting news with the Ethiopian News Agency: the airline’s earnings went up by 20 percent to hit an astonishing $6.1 billion in the 2022/2023 fiscal year.
This stunning success came despite the global travel challenges posed by the Russian-Ukraine war, solidifying their position as one of the world’s most profitable airlines.
Their remarkable rise was evident in snagging the 35th spot in the esteemed Skytrax World Airline Award for World Top 100 Airlines 2022, outperforming Air Canada (38) and American Airlines (82).
Additionally, Ethiopian Airlines claimed Africa’s top spot, surpassing Royal Air Maroc, South African Airways, and Kenya Airways (ranked 53, 72, and 73, respectively) on the global stage.
Armed with the ambition to be among the top 20 airlines in the world by 2025, the 120-fleet airline company has targeted, according to reports, growing its annual passenger number and projected earnings to 25 million passengers and $10 billion between 2025 and 2030.
Interestingly, Nigerian airlines like Air Peace and Arik Air, though very young in the industry when compared to Ethiopian Airlines, were conspicuously missing from the rankings. Theirs’ and the absence of defunct indigenous carriers like Nigerian Airways and several of them calls for an extensive examination of the airline industry.
Examining where we as a nation got it wrong and what lessons can we learn from Ethiopian Airlines and other African carriers in our quest to have a truly domestic carrier that can fly the heights they are flying.
Furthermore, this report delves into Ethiopian Airlines’ 60-year journey, examining its remarkable achievements and drawing key lessons for Nigerian airlines and the government to replicate.
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The evolution of Ethiopian Airlines and the examination of its winning model
A journey spanning 60 years with successes that many airlines and other corporate organisations envy didn’t come easy for Ethiopian Airlines, whose home country (Ethiopia) is riddled with poverty and low agricultural productivity.
Learning from Ethiopian Airlines’ resilience in surviving military intervention and financial adversity should serve as a valuable lesson for Nigeria, which shares a similar historical context.
Despite facing financial and moral challenges imposed by Ethiopia’s military government, the airline persevered, offering Nigeria an opportunity to appreciate and draw inspiration from their success story.
According to researchers Arkebe Oqubay and Taffere Tesfachew, in their research paper titled “The Journey of Ethiopian Airlines Technological Learning and Catch-up in Aviation,” Ethiopian Airlines success comes from three distinct phases.
They said that Ethiopian Airlines (EAL) evolved in three phases: building capacity with Trans World Airlines (TWA) until 1975, protecting and enhancing its ability to excel amidst crises—the military crises until 2000—and finally, modernising, improving, and expanding competencies from the millennium onwards.
The researchers said, “EAL developed in three distinct phases. In the first, the airline built absorptive capacity and capability through learning by doing in partnership with TWA, and it pursued a proactive Ethiopianization or localization policy. This phase lasted from EAL’s establishment in 1946 until the end of the TWA partnership in 1975.
“In the second phase, from 1975 to 2000, by managing a series of externally generated crises, EAL protected and maintained the capability and corporate independence acquired during the first phase and built further capability.
“In the third phase, which began with the new millennium, EAL has upgraded its capability, improved its processes, diversified its competencies, and caught up.”
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Other views on the reasons behind the airline’s success
“The airline’s clarity of vision and independence from the government in everyday operations enabled it to meet its 2022 objectives in 2018,” Afropage said in their YouTube video, which chronicled the secrets behind the success story of the company.
Afropage added that despite government interest in the company, the management is given a freer hand to handle the operations of the company.
This allows the management to appoint competent hands that will enable it to compete with the best airlines in the world.
This is in sharp contrast with the defunct Nigeria Airways or the non-existent Air Nigeria, whose government involvement prepared a foundation for failure.
Another reason for its success that Afromedia identified is its connectivity and dependability. “Ethiopian Airlines has created air connections throughout the continent, thereby accomplishing its slogan of throughout Africa and beyond,” it said.
It said the airline has stood firm in serving African countries in good times and in difficult times, and as a result, it has established itself as a dependable ally and airline in Africa. This attribute, as observed from Air Peace operations, can be fully imbibed into its identity.
The emphasis on new technologies is another driving factor behind the airlines dominance in the African airspace. According to Afromedia, “they always emphasise new technologies, and those new technologies are essential to their success. They are constantly bringing in new aircraft and a young fleet, and this contributes to their success.”
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The airline has been known to have invested more resources into its safety reputation, cabin staff friendliness, ease of booking, luggage allowance, and shortest route to a destination. Qualities that have endeared passengers to them over the years.
Unlike the Nigerian government’s lack of a protectionist policy to help grow our local carriers, the Ethiopian government has developed a strong defence for the airline.
“It is exceedingly difficult for a foreign airline to obtain landing privileges in Addis Ababa,” Afromedia said.
Afromedia, in summary, said that Ethiopian Airlines has built its reputation and successes on “dedication, corporate mechanisms, and government backing, as well as a high level of efficiency.”
Backing Afromedia observation, the International Finance Institute, a global research organisation, emphasised the importance of operational independence despite being state-owned and the benefits it gets from its geographical location.
The institute noted that the airline, despite government ownership, operates autonomously with a business-oriented approach, meeting Vision 2025 ahead of schedule and now striving for Vision 2035.
It said, “Additionally, Addis Ababa’s location has transformed it into a crucial aviation hub, attracting and transferring extensive global traffic, with plans for massive airport development to become Africa’s busiest.”
