Ethiopian Airlines on track to achieve Vision 2025
Lee Kok Leong interviews Tewolde GebreMariam, group CEO of Ethiopian Airlines on the future of the airline.
April 20, 2017
By Kelsea Koh
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.