Ethiopian Airlines with over 90 planes is the largest airline in Africa and the only profitable one. Both Kenya airways and South African airways continue to make losses. The 70 year old Ethiopian Airline has been growing steadily and recently, it introduced the dream liner, the 787-8 which Kenya followed with disastrous financing results and Ethiopian has already introduced the 787-9, the first African country to do so. It is said that even during the times of Col Mengistu Haile Mariam who introduced socialism in the country, the airline continued to work profitably. The success of Ethiopian airlines is attributed to a number of factors. These include:
Government ownership with necessary government support
Low level of corruption in the Ethiopian economy which has bedeviled many African countries leading to poor performance of government and government parastatals
Of course being there first is another factor. In 2016, Ethiopian Airlines celebrated 70 years, definitely the learning curve should provide it with an advantage. The airline also has an advantage of an internal market. Internally, the airline flies to over 20 destinations. But it is possible that it’s marketing strategy that has propelled the airline to its leadership position in the African market. The airline collects passengers in small numbers from different parts of Africa using small planes and it aggregates them and delivers on medium to long haul routes for instance, it would collect passengers from Cameroun, Uganda, Ghana, Burundi and take them ti Lusaka, Washington DC, Europe and Asian destinations. It also does the reverse. This is where the Dreamliner has been very effective.
Ethiopian flies to over 100 international destinations across 5 continents and in the last year it carried about 9M passengers. From the time I knew Ethiopian Airlines in the 1970s, it used to fly to Beijing, then Peking. With more than 100 international destinations, Ethiopian airline is adding new routes, they are opening a second route to South America. They will be flying to Sao Paulo in Brazil after Buenos Aires. They have continued to go to African towns where they think there’s business. The marketing effort has been so successful that it has created challenges. While Bole Airport in Addis built several years back is big by African standards, it is not well designed, today there’s a flood of people at the airport. The planes are running late and there are signs of over booking.
A missing element in the marketing strategy is English, from the national point of view, it is in order that they use Amharic as first language of announcement, they don’t do very well in English. To me, this is an easy thing to do, the people making announcements on plane should be able to speak good clear English. I have not been to china on their flight but I guess, the Chinese language would be added to their announcements on flights to china. Uganda is planning to restart Uganda airlines, I have been a strong advocate against the airline for the time being looking at what Ethiopian is doing giving Kenya Airways and South African Airways, a run for their money, Uganda would struggle. It is okay to borrow money, have planes and an airline that makes losses. This is happening in many parts of Africa in the interest of national pride. But if others are delivering the service cheaply, I don’t see a reason why we don’t invest this money in the Education sector. When the oil starts flowing in Uganda, investment in a Ugandan airline may be cheaper, even at that time, business may be bigger with more passengers than we have today. But the biggest killer of businesses owned by African governments has been corruption. Can a Uganda airline be spared by it? I guess my protestations are of no effect, I can only lament. The learning curve of Ethiopian airlines will not allow new airlines in Africa to compete meaningfully.
