Friday, August 1, 2014

Ownership Does Not Determine Success of an AirlineVice-President of Ethiopia Airlines

Vice-President of Ethiopia Airlines, Esaya Wondermariam Hailu
Vice-President of Ethiopia Airlines, Esaya Wondermariam Hailu, visited Nigeria recently and spoke about how an African airline can be successful, the potential of Nigerian aviation market and the partnership between Ethiopian Airlines and Nigerian travellers. Chinedu Eze presents the excerpts:
Why are many African airlines failing; has it got to do with ownership?
Ownership is not the question. There are so many private airlines which came and faded away and there were government owned national carriers also in other parts of the world which have survived and thrived. For example, when we take the case of Ethiopian Airlines, despite 9/11 terror attack on US soil, Severe Acute Respiratory Syndrome (SARS) which affected air transportation, energy price hikes; at least two domestic revolutions: the toppling of Monarchy in Ethiopia and the toppling of the military junta in Ethiopia, Ethiopia-Eritrean war, all these were obstacles that were survived by Ethiopian Airlines.

The secret is not in the ownership, whether private or government owned. If it is squandered or mismanaged, it will be no more. So, it is a matter of diligent management. When it comes to Ethiopian Airlines, government has given the management of the airline 100 per cent autonomy to run the company with industry discipline in economic sense. The only thing they request at the end of the year is to show them the numbers; our performance.
Any company that is in Africa be it private or government that has hardworking workforce, diligent management, prudent cost management and customer service and if you continue to maintain these, your business is going to succeed.


How do you finance your fleet expansion, sustain your operation. Do you hedge fuel?
Let me start with how we finance our fleet expansion. Number one, the Ethiopian government being the shareholders gives us guaranty. Number two, the aircraft manufacturing countries give us guaranty. For example, when we import Boeing aircraft from the US, the American Exim Bank, because they want to encourage the export of their national products, assist us with financial facility. They know our performance; they follow our track records, our credit worthiness, so they participate in the financing. Because we are 100 per cent government owned, we don’t sell shares; we are not listed, so we cannot trade cash. But we completely finance our equipment from, year to year. We operate and we make profit. We pay our principals and interests on time. So we are self-financed airline. We finance our fleet from our annual operational profit, from our revenue, from our own cash flow.

Number two, when we try to see the different halves in Africa, how we integrate them. There is a concept in the airline called halving stock. For example, Asky has 22 destinations in the west of the continent of Africa. they siphon all the traffic and feed us at different locations: the Francophone African in Lome; the Anglophone like Monrovia, Freetown and Banjul and Accra etc. there are other places like Mali, Bamako, and from there we take them to the eastern part of the content to southern part of Africa, to Middle East, Asia, Europe or America. The same is true with Malawian, based in Lilongwe; they operate to Johannesburg; now they have already started to Dare Salam and Lusaka. Now they are going to expand to Maputo, Bulawayo and other places. So they collect the traffic and feed us in Lilongwe, from Lilongwe we take them to the rest of Africa and the rest of the world.

By so doing we create an integrated collection within Africa and also we connect Africa to the rest of the world. This is because as we see, Africa is not road or rail interlinked. If you try to build roads from Southern Africa to the North, from West to East, it is going to be thousands of kilometres, but by building an infrastructure of just three kilometres, an aircraft can depart from that and go to the rest of the world. With small investment of infrastructure you connect people in the continent; you export cargo, so business in Africa can get strengthened with that low level of investment.

Although aviation unfairly is highly taxed in Africa; aviation is taxed more than tobacco and coal; it is highly regulated, highly taxed and highly restricted, but it is the most essential service that everybody wants to have. African governments ought to liberalise the African skies, in accordance to Yamoussoukro Decision. Right now many African countries have given flight rights to the Gulf carriers than their own African airlines. That needs to be corrected for Africa to thrive. This is because when we started operating in many of African countries, they were still fighting wars and we didn’t desert them; even when the number of crew was less than the number of passengers. We have kept on developing the routes for half a century, now an airline comes with 10 years of history and they give all the traffic rights to them. This is a misplaced priority, so we have to rethink our decisions.

Regarding fuel, Ethiopian Airlines like any of our industry partners do fuel hedging, but not 100 per cent because we have to diversity our risk. We hedge half of our consumption, the other half we leave it open. So if the price of fuel gets up we at least try to budget a benchmark with the hedged one, and if it reduces, then with the hedged one we can put our balance sheet in better shape.

What are the security and safety measures you carry out while operating into war torn areas in Africa and what is your corporate social responsibility for Nigeria as your biggest operational destination?
There are pockets of problems in different parts of Africa, so what is Ethiopian Airlines doing or plans to do in connection with that? We are Africans and we are not new to problems. Africa has been tried and tested and has passed several problems. Ethiopian Airlines is very African, pan African to the core, so we were born and brought in this continent of Africa. We have acclimatised since our inception and we know how to handle problems. We are flexible. We have backups and so on and so forth. In fact, we have passed through more problems within Africa as I have told you earlier.

If there is crisis in some locations if we run away it won’t show that we are sustainable partners. What we do is, we have backups. For any airline, according to ICAO rule, whenever there is problem in one airport there is alternate airport to land. So our flight planning is designed in such way. We keep operating in such place as long as the nation is not a failed state. We have been serving Africa and we will continue to serve Africa. We feel that we should contribute to the solution when there is problem. If we desert them when there is conflict, the conflict would be exacerbated by economic problems. If at least we continue to operate, traders will go and come in with essential things so that they will be able to get over their problems. That is what we believe in, so we are partners in progress.

On what should Nigeria expect from Ethiopian Airlines, number one, immediately after the British left 55 years ago, we came. Since then Nigeria had its ups and downs and good and bad times, we continued to operate. Ethiopian Airlines is like a fateful friend or a brother. Ethiopian Airlines is not just a business establishment of a profit company that has been operating. Now, our outlets are four in different geopolitical zones of the country. It is our own way to dispense justice for all people from different parts of the country to depart from their own international destination. And we are bringing in cargo and we are taking fresh export from Nigeria to the Eastern part of Africa and to the rest of the world. We are even promoting tourism for Nigeria. We make paid advert about different attraction to the country. We bring tourists from Canada, USA, Europe and East Asia. And when tourists come, of course, the country will gain economic advantage out of that.

So the partnership will continue. We try to offer them alternatives as most competitive prices, brand new aircraft and we have introduced Nigerian movies from Nollywood and of recent we are planning to introduce Nigerian food like plantain and yam and others. So the Nigerian public can expect more and more from us because we are very African; we are very Nigerian. We are contributing to Nigeria’s aviation growth. Ethiopian Airlines sales manager is a Nigerian. Many international airlines appoint expatriates as their sales managers, but we have a Nigerian as our sales manager. We have a Nigerian that is in charge of all the sales in the entire country. All our local employees in Nigeria ate Nigerians: in Enugu, in Lagos, in Kano and in Abuja. They are all Nigerians.

When you fly our aircraft you will see pilots from different parts of Africa. When we have vacancy we advertise for everyone in Africa so many people in the continent have taken advantage of that and they are working with Ethiopian Airlines. This is also open to Nigerians to come and participate. We already have co-pilots and we have cabin crew from Francophone Africa, from Togo, from Senegal, from Ivory Coast and from other parts of Africa as well.

Other thing is that we make our passengers feel at home; we even try to know our passengers by name. Our cabin crew speak pidgin when they meet Nigerians. When our cabin crew ask our Nigerian passengers, do you want beef or chicken, they say both; they serve them both. That is special African hospitality tailored to the African passengers. We treat them in a way that you cannot get from other international airlines because we are Africans; we know how to treat a man or woman. So they can expect many things from us.

How do you manage the poaching of your highly skilled personnel and what is your sincere advice to Nigeria about how it can get involved and benefit from the high passengers traffic that leaves its shores every day?
When other airlines in the industry are poaching our flight engineers and pilots, our aviation professionals, management executives; we do not want to control it. That decision is by design. We have already broadened the inlets and our aviation academies are positioned to train 1000 graduates per annum. So we want our African aviation professionals to get trained there, get employed in Ethiopian Airlines or elsewhere, or we want to even export aviation professionals to the Gulf, to Europe, to the Far East and to the South East Asia. Why we do this is because they bring remittance. We empower our people, as it is said, education is the greatest equaliser. So we produce; we train, we sustain our needs and we cater for the rest of the world. That is what we plan to do and we are doing it.

My advice to our Nigerian brothers and sisters is to get enrolled in our highly accredited aviation academy. It has been accredited by the International Civil Aviation Organisation (ICAO), International Aviation Safety Assessment (IASA), International Air Transport Association (IATA) and the US Federal Aviation Administration (FAA) standard. We want them to visit; to study there and then they can get employed either in Ethiopian Airlines or any of the African or non-African carriers.  By strengthening their aviation professionalism and proficiency, they can run private or public or government partnership aviation companies. The more people are there in the aviation profession, the better Nigerian aviation can be managed.

Ethiopian Airlines is a leading airline in Africa but I find out that it does not sell Ethiopia as a destination. Why is it so?
Ethiopian Airlines has already carved out an in house tool called Ethiopian Holidays. Like Emirates Holidays or BA Holidays, we have Ethiopian Holidays. It is a programmed package because Ethiopia has nature, Ethiopia has culture, Ethiopia has wild life, Ethiopia has history, so there are many things to discover in the country. Like any other parts of Africa, Ethiopia has many things to offer by way of tourism. We are doing a stopover package. When you are transiting, for a day or two, you can buy that package; explore the country to whatever length of days that you want because there are different programmes. After exploring Ethiopia you can travel to any part of Africa or any part of the world. That is already integrated; in fact, it is going to be the eighth business unit in the future.
We expect that there should be exchange of visits between Ethiopia, Nigeria and other countries in Africa. Why are you not emphasising these things so that we can visit your country instead of travelling to Dubai in order that our money will remain in Africa?
I have travelled to many parts of Nigeria. When I visited the University of Ibadan, I met one Dr Jacob from Ethiopia who was a lecturer in that university. The Ethiopian man was married to a Nigerian woman. I see many Nigerians from the northern part of the country going to the Mecca and Medina for pilgrimage. But Ethiopia being one of the old civilizations of the continent is a home to both Christians and Muslims. This is because in the northern part of Ethiopia there are rock hewn churches, monasteries and castles which are 1,500 years old. So there are many people coming for pilgrimage to the Saint Mary Monastery and others.

And also for the Muslims, there is a Mosque of Negash where the Prophet Mohammed sent his disciples to flee to Ethiopia when they were going to be attacked and be eradicated from the planet. They were hosted in Ethiopia and from there they strengthened their forces and went back and Islam now covered the planet. So Islam credits Ethiopia for its surviving and thriving. Because of that from Mecca and Medina to Jerusalem, the first holy site is in Ethiopia and many people are coming there. So Ethiopia has to cater for all kinds of old civilisations, religion, culture, history and wild life. There is a lot to come and explore in Ethiopia.

Ethiopian business people, Ethiopians working for the UN in Abuja and other places live here in Nigeria. Even in the Ibru family, there is an Ethiopian woman. So there are a lot of relationship between Ethiopia and Nigeria. The two are fast growing economies, the largest black population on the continent and in the Eastern and Western part of the continent, which are big powers, so they have a lot to contribute to the entire continent. We need to know each other more. So far, we know so much about Nigeria. One of you said that Ethiopian women are beautiful; my wife says that Nigerian women are very, very beautiful. My wife watches Nollywood from the DSTV, African Magic. My wife talks and gestures like Nigerians. She likes Nigerian movies, Nigerian women very, very much.
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