The impressive rise of Ethiopian Airlines
Ethiopian Airlines has been the fastest-growing airline in Africa over the past decade or so. It has succeeded where many other airlines have struggled, largely due to a strong plan set out in 2010. In December 2020, it won the best African airline award in the Decade of Airline Excellence Awards. How has it risen to this level?
Ethiopian Airlines began was founded in 1945 and started flights in 1946. Emperor Haile Selassie I asked foreign countries to assist the modernization of the country and the foundation of a new airline. With backing from TWA, it acquired five Douglas C-47 aircraft from the US government and began regional flights from Addis Ababa. The first regular flights were to Cairo and Asmara. Khartoum, Djibouti, and Aden were soon added. Flights further afield began in 1948 with Bombay.
The airline received further funding in 1950 from the US Export-Import Bank. This helped it acquire newer Convair aircraft and start flights to Europe. Another loan saw the DC-6 introduced in 1956. Ethiopian was the first African airline to order the Boeing 767, with delivery in 1984. By the end of the 1990s, it was also flying to South Africa (Johanessburg), Asia (Beijing and Bangkok were the first destinations), and the US (New York and Washington DC). Its role as a global hub airline was well on the way to developing.
South African Airways was a major competitor at the time, also developing global connections. It had started flights to Europe in 1945, Australia in 1958 (Perth with a DC7 aircraft), and New York in 1968. It took delivery of its first 747 in 1971 (and went on to operate 23) and began longer routes, including Seattle, Hong Kong, and Taipei.
South African Airways’ growth was to hit problems, though. There were troubles in the country under apartheid during the 1980s. And due to international opposition, many flights were stopped. This included all flights to the US and Australia. While they served different markets, the problems at South African likely gave Ethiopian Airlines a boost at a key time in its growth.
The rise of the airline to be the best in Africa really started in 2005. At the time, the airline was behind South African Airways, EgyptAir, and Kenya Airways in terms of passenger numbers. But it launched a plan to grow its passenger volume to three million by 2010.
By 2010, it had exceeded this target. Air Transport World named it the most profitable airline in Africa that year. It launched a new expansion plan, dubbed ‘2025-Vision.’ This was a much more ambitious plan to become the leading African airline. It aimed to increase passenger volume to 18 million and more than double its fleet to 120 aircraft.
The ‘2025-Vision’ plan worked, in fact, better than expected. By 2018, it has already increased its fleet to over 100 and has to revise its target (as reported by Reuters). Chief Executive Tewolde Gebremariam said at the time: “We have expanded more than we planned. We had to revise the objective to make it 150 airplanes or more by 2025.”
Ethiopian Airlines became the largest African carrier (by passenger numbers) by 2019. Simple Flying looked at this impressive growth in more detail at the time. We noted that in the year to 2019, passenger volume had risen 14%, compared to IATA’s predicted average annual increase for Africa of 4.6%. This was accompanied by a revenue increase of 30% (US$3.9 billion) for the year to 31 July 2019.
As well as growing its hub traffic in Addis Ababa, the airline has looked at adding connectivity elsewhere in the region. With political and financial restrictions, one of the best ways to do this is through investment in other airlines. In 2013, it took a 49% stake in Malawi Airlines.
And in 2018, it started working with the Zambian government to relaunch Zambia Airways (in which it took a 45% stake). It also has taken stakes in ASKY Airlines and Ethiopian Mozambique Airlines.
