Business

Beyond Profits: Ethiopian Airlines’ Rapid Growth is Helping to Transform its Home Country

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Ethiopian Airlines
Ethiopian, which placed first in the 2015 APEX Passenger Choice Awards’ “Best Airline in Africa” category, is an outlier among Africa’s state-owned carriers. Image via Ethiogrio

APEX Insight: Ethiopian Airlines has been one of Africa’s star performers over the past decade. The airline’s growth is not only mirroring the breakneck pace of economic development in Ethiopia, but actively contributing to it. APEX Media spoke with Hanna Atnafu, Ethiopian’s Corporate Communications manager, to learn more about the state-owned carrier’s ambitious long-term plans.

Africa’s airline industry has experienced heavy losses recently, but an ambitious growth strategy is helping Ethiopian Airlines soar above the turbulence, while other African carriers fight to break even.

Ethiopian, which placed first in the 2015 APEX Passenger Choice Awards’ “Best Airline in Africa” category, is an outlier among Africa’s state-owned carriers. Unlike other government-run airlines, it’s rising fast; since 2005 annual growth rates have been between 20 to 25 percent. In 2015, it recorded profits of $148 million which, according to data from the International Air Transport Association, is more than all of the other African carriers combined.

The Star Alliance member’s success has gone hand-in-hand with Ethiopia’s remarkable economic progress. The country’s capital, Addis Ababa, now dubbed “the Dubai of Africa,” is undergoing a construction boom and recently opened the continent’s first metro rail system. The rapid pace of development is something the airline believes it’s actively contributing towards.

“The airline has a national obligation to play a role in the country’s broad-based, decentralized and all-inclusive socio-economic development.” – Hanna Atnafu, Ethiopian Airlines Corporate Communications manager

Hanna Atnafu, Ethiopian’s manager of Corporate Communications, says that, as a state-owned flag-carrier, it must think beyond profit-making. According to her, “The airline has a national obligation to play a role in the country’s broad-based, decentralized and all-inclusive socio-economic development.”

One way Ethiopian does this, explains Atnafu, is through championing the country’s booming tourism sector. Just last year, the European Council on Tourism and Trade named Ethiopia the “World’s Best Tourism Destination.” “Offering services to all of the country’s major tourist destinations means we’re creating market opportunities for hotels and other businesses across Ethiopia, facilitating both business and leisure travel,” says Atnafu. The airline also offers scheduled services to five continents and provides connecting flights to over 50 African destinations via its Addis Ababa hub.

Ethiopian Metro

Over the past decade, visitor numbers have risen by around 10 percent annually. Approximately 681,000 tourists, likely attracted by the country’s nine UNESCO World Heritage sites, spent time in Ethiopia last year. The revenue generated by the tourism industry made up 4.5 percent of Ethiopia’s annual GDP in 2015 and supported over one million jobs.

The airline isn’t planning on slowing down any time soon. Ethiopian has invested big sums in a massive fleet expansion program, including 13 Boeing 787 Dreamliner aircraft. It will also be the first African carrier to own and operate the Airbus A350-900 when it begins receiving the first of 14 jets later this year. It’s also taking development of its human capital very seriously. Earlier this month, it opened its new $100-million aviation academy at Addis Ababa Bole International Airport, where it plans to train as many as 4,000 students each year, including pilots and cabin crew, by 2025.

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