Tewolde GebreMariam is running the largest and most profitable airline in Africa. This fact alone is a testament to his focus and capability. After talking to him, I am convinced thatunder his leadership, he has already laid a solid foundation on which to exceed the objectives of Vision 2025, a 15-year strategic plan to transform Ethiopian Airlines.
Tewolde also wears many other hats. He is on the board of many of the major Ethiopian state-owned enterprises; leads Pan-African aviation initiatives and sits, with the UN Secretary-General on the high-level Advisory Group on Sustainable Transport. He is also a member of IATA Board of Governors.
He told me that it is certainly not easy to juggle so many roles and to succeed at them. But by all accounts and results that followed, Tewolde has certainly managed to balance all the roles successfully. The single thing that strikes me most is his single-minded focus to contribute to his country and the airlines industry.
Please talk about Ethiopian’s vision
Our slogan, New Spirit of Africa, comes from Vision 2025. Seven years ago, we came up with Vision 2025, which lays out plans for the next 15 years on what we want to achieve for the airline and how to achieve those objectives. Addis Ababa, our hub, is in the middle of the China, India – Africa – Brazil trade lane. We determined from analysis that this is a region which is going to grow perhaps the fastest in the world in the next 10 to 20 years.
If we are located in this growth market, we have the opportunity to grow to whatever level we want to grow. So we came up with all the figures in Vision 2025: US$10 billion annual turnover with US$1 billion profit, 140 airplanes flying to more than 120 international destinations, carrying more than 22 million passengers and 820,000 tons of cargo and so on.
Once we have the objectives, which are both challenging and ambitious, we then came up with the strategy. The first strategy is to define ourselves as a cost leader, meaning we are not a low-cost carrier but a full-service network carrier but we will be leading the industry in unit cost. We will provide all global standard services at the lowest possible cost, whether this is for passenger airlines, cargo airlines, MRO, catering, training or ground services.
The second strategy is operational excellence. Since we are a network carrier connecting traffic, with more than 70 percent of our traffic connecting at Addis Ababa, we have to therefore make it super efficient. We are also aiming to be a four-star airline in terms of customer service but with five-star service delivery. So the differentiating factor will be the way we deliver the service, meaning the human touch.
Another important element of Vision 2025 is the concept of the four pillars. The first pillar is the fleet. We have to get the fleet right in terms of commonality and fit for purpose. The next one is the infrastructure. Not many airlines invest a lot of money in infrastructures. Unique to us, we have huge infrastructure in Addis Ababa. So in the last five years because of our focus on infrastructure, we have spent US$0.5 billion. We are building the largest cargo terminal in Addis with additional 600,000 tons of annual capacity and parking of seven airports at any one time, the largest catering unit in Africa, the largest training academy and MRO facility. We are doing this to make sure we are self sufficient.
And then we have human resource development. This is critical in Africa because manpower is a scarce resource and we don’t want to suffer any shortage. We have invested in a US$100 million training academy where currently, we are training 1,500 trainees in all areas of aviation operations. The capacity can be scaled up to 4,000 trainees.
And the final pillar that brings everything together is the system. System means policies, procedures, processes, global standards and so on. Right now, we are moving to become a paperless airline. We have computerized and automated the back offices and front lines.
“It is proof that this business model and the strategies are the right ones because in the last six years, we have exceeded all the yearly targets in Vision 2025.
What is your view on leadership?
I believe in teamwork and collaboration. No one on their own can produce results. Another factor is to focus on a long term view. We cannot run a business from quarter to quarter. Also, there must be commitment and dedication from the top management team in working together with the rest of the staff . At the same time, I believe in succession planning. A company must not just depend on one person or a few people. We must build up a good team of young people who will come up and take over.
The leadership needs to focus on growth too. As you know, the airline industry is volume-driven. It is very challenging and the margin is very low. That very low margin can be wiped out by a number of variables like the fuel price going up, political/civil unrest, infectious disease epidemic, and foreign currency fluctuation, among others. So we have to be very focused.
What is your opinion on the African economy in regards to the new paradigm shift away from globalization?
I don’t think anyone can afford to run away from globalization. It can be compared to a flood, the best way is to swim in the direction it is flowing. I understand the movement in Europe and the US but I think this is short-lived populism driven by domestic politics. The world today is very integrated. No country can afford to go out of the network because the network is very strongly integrated. I would say globalization will be like taking two steps forward and one step backward.
Then the next issue is movement of capital. Capital is going to find the best returns on investment. China has attracted global capital for the last decade or two and it will continue to do so. However, as manufacturing labour cost is going up in China, capital will find other lower-cost countries. So what are the attractions for capital today? Number one is relatively low labour costs, number two is availability of land, number three is availability of natural resources, number four is a young workforce and access to the consumer market. If you look at Africa, it is ahead of the curve right now. These four factors will attract foreign direct investment to Africa and that make it the next frontier of globalization.
What do you think has contributed to your personal success?
Hard work and focus. I believe that taking a long term view of everything is very important especially for business, because in the short term, there is not much you can do. If you take a long term view, your chances of success are higher. There is this concept of double visioning. I use one eye to focus on the present and the other eye to focus on the future. Balancing of this double visioning is very important.
Largest network cargo operator in Africa
Ethiopian Cargo is the largest network cargo operator in Africa. With six dedicated Boeing 777- 200LRF and two Boeing 757-260 freighters, it serves 36 cargo destinations in Africa, the Gulf, the Middle East, Asia and Europe with an average daily uplift of 650 tons on top of the belly hold capacity to over 90 destinations in its network with daily average uplift of 150 tons.
Ethiopia is perfectly situated in the center of the emerging economies and Ethiopian Cargo, as the largest cargo operator, is also contributing its part to the economic growth through its main hub, Addis Ababa Bole international Airport. In line with the Vision 2025, Ethiopian Cargo is building a state of the art cargo terminal with an annual capacity of 1.2 million tons and planning to serve 47 destinations using 18 freighter aircrafts.
The terminal will include facilities for perishable goods aimed to support the country’s export of perishables including flowers, fruits, vegetables, meat and operational April 2017. Ethiopian Airlines Group CEO Tewolde Gebremariam said, “Upon completion, our uplifting capability will be equivalent to the cargo terminals at Amsterdam Schiphol, Singapore Changi or Hong Kong.”
Largest aviation academy in Africa
Ethiopian Aviation Academy (EAA) is the largest and the most modern aviation academy in Africa recognized as ICAO regional Training Center of Excellence. To train aviation professionals from classrooms to simulator training, EAA offers industry standard training for pilots, aircraft technicians, cabin attendants and ground services staff both for initial and recurrent students.
The Leadership and Career Development Center is training thousands in management and leadership skills.
Cabin crew training simulates real time scenarios with training aircrafts designed for emergency drills and service training. The pilot training school has light aircraft, motionless and moving simulators on both training and jet aircraft. Virtual Maintenance Trainers (VMTs) and various workshops feature aircraft maintenance training. Beyond these, the academy is venturing into e-learning and virtual classroom training. Trainee facilities include a cafeteria, dormitories, an administration complex and a plush new auditorium. Th e academy plans to take in 4,000 students a year.
Ethiopian Airlines Group CEO Tewolde Gebremariam said, “At Ethiopian, we are very proud of the new heights Ethiopian has flown in the year. We celebrated our 70th anniversary, inaugurated the largest and the finest Aviation Academy in Africa and a state-of-the-art in-flight catering facility which is the largest in the continent of Africa, introduced Africa’s first Ethiopian Airbus A350, and spread our wings to more countries on five continents”.
Ethiopian expands network with seven new destinations
Ethiopian Airlines announced that it will launch seven new destinations in the first half of 2017.
From February to June, Ethiopian Airlines is launching new services to Victoria Falls (Zimbabwe), Antananarivo (Madagascar), Conakry (Guinea), Oslo (Norway), Chengdu (China), Jakarta (Indonesia) and Singapore (Singapore). With the addition of these stations, the airline will have service from Addis Ababa to 98 different international cities across the world.
Group CEO of Ethiopian Airlines, Tewolde GebreMariam, said: “Africa’s share of the global aviation is the smallest which is only around three percent. As the largest airline group in the continent, we are highly concerned on the low base of air connectivity in the continent and we are setting record expansion to enable Africans to enjoy safe, reliable and economical air connectivity both within the continent and between the continent and the rest of the world.
“Looking beyond the current economic slowdown especially in the oil export dependent economies of Africa, we firmly believe that the continent will become the magnet for foreign direct investment, trade and tourism, which are the engines of air travel growth. In turn, efficient air connectivity also drives socio economic development and we are happy to contribute our share in the 21st Century African Transformation.”
In the just ended calendar year alone, new flights to Moroni (Comoros), WindHoek (Namibia) and Newark (United States) were launched, as well as three cities in Ethiopia: Hawassa, Kebridahar and Dembidolo.
